<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-SB
General Form For Registration of Securities of
Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
NURESCELL INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
Nevada 33-0805583
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2030 Main Street, 13th Floor
Irvine, California 92614
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
ISSUER'S TELEPHONE NUMBER: (949) 260-4925
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
None N/A
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.0001 par value
(TITLE OF CLASS)
Class "A" Common Stock Purchase Warrants
(TITLE OF CLASS)
Class "B" Common Stock Purchase Warrants
(TITLE OF CLASS)
<PAGE>
EXPLANATORY NOTE:
Nurescell Inc. (the "Company" or "Registrant") is filing this Form 10-SB
voluntarily. The Company intends to seek to have its securities quoted on the
OTC Bulletin Board, for which a registration under the Securities Act of 1934 is
now required. As a result of the filing of this Form 10-SB (the "Registration
Statement"), the Company will be obligated to file with the Securities and
Exchange Commission certain periodic reports, including an annual report
containing audited financial statements.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
(Note: The Company has elected to follow Disclosure Alternative 2 in the
preparation of this Registration Statement.)
ITEM 6: DESCRIPTION OF BUSINESS.
THIS REGISTRATION STATEMENT CONTAINS CERTAIN FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. AS A RESULT OF
CERTAIN FACTORS DESCRIBED BELOW AND ELSEWHERE IN THIS REGISTRATION STATEMENT,
AND OTHER FACTORS, ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED
IN THOSE FORWARD-LOOKING STATEMENTS.
GENERAL. The Company was formed in Nevada on May 12, 1998 for the
purpose of developing and commercially exploiting a proprietary radiation
shielding technology (the "Nurescell Technology") for use by the nuclear power
industry and others producing, handling or storing radioactive materials. The
Nurescell Technology is being designed for incorporation into the structural
components of new and existing nuclear reactor facilities in order to provide a
cost-effective safeguard from the lethal effect of radiation while achieving a
minimal disruption to existing physical facilities. It is also being designed
as a containment material which will provide an attractive alternative to the
conventional concrete/steel entombment and classification technologies currently
used to store ever-increasing amounts of spent nuclear fuel and other
radioactive waste. In addition, it is expected to provide an innovative
shielding material critical to advanced accelerator and defense research
applications. The Nurescell Technology is based upon a proprietary formulation
which was acquired from Adrian A. Joseph, Ph.D., the Company's President and
majority shareholder, in June 1998. See "Interest of Management and Others in
Certain Transactions." The intended market and primary application for the
Company's products will be nuclear power plants, accelerators and waste storage
facilities worldwide. Based on the potential applications for the Nurescell
Technology, as well as the potential markets, the Company believes that there is
a substantial opportunity to develop a profitable business over the next 24
months. However, because the Company is in its start-up and research and
development and testing stage, it currently has no final products and no sales,
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and is not currently marketing the Nurescell Technology. As a result, there can
be no assurance that the Company or the Nurescell Technology will be successful
or that the Company can or will achieve any sales or profitability.
THE PROPOSED PRODUCTS. The Nurescell Technology is expected to be
superior to existing and competing technology which is based upon a ceramic
silicon foam (also originally developed by Dr. Joseph). It is believed that
products based on the Nurescell Technology will possess characteristics which
include:
- Favorable Heat Transfer and Diffusion Properties
- High Radioactive Resistance
- High Compressive and Tensile Strengths
- Corrosion and Shrinkage Resistance
- Fugitive Gassing Properties
- Resistance to Weathering and Aging
- Ease of Application and Handling
- A Non-Hazardous Application Process
In addition, Nurescell's products are expected to result in
significant reductions in the weight and volume of encapsulated nuclear waste
and/or on-site spent fuel depository space. If achieved, those characteristics
are believed by the Company to be superior to ceramic silicon foam (which does
not have mechanical strength, shrinks when subjected to high temperatures and is
comprised of hydrogen chains which are a potential danger in high temperature
environments) and thus correct some of the most acute problems associated with
conventional nuclear materials and the resultant radioactive waste problems. In
addition, the physical performance characteristics of Nurescell Technology
materials are expected to expedite advances in nuclear accelerator and
innovative fuel projects, which require special performance materials for their
facilities.
The Company's products are currently in the sample testing stage. At
this point, the Company has completed a "Statement of Work" with the U.S.
Department of Energy ("DOE") and Lawrence Livermore National Laboratory
("LLNL"), and is in the process of finalizing a Cooperative Research and
Development Agreement for product testing and market development with the DOE
and LLNL (the latter of which will conduct the sample testing). After
commencement, it is anticipated that LLNL's test and evaluation process will
take approximately nine months.
After the performance of the Nurescell Technology has been
satisfactorily evaluated by LLNL, the Company will seek to incorporate Nurescell
Technology products into field studies of specialized applications and into
bench scale and field trials of specialized private enterprise equipment.
Simultaneous with that phase, the Company will use its best efforts to seek out
and form various strategic alliances for the use of its products in nuclear
material handling equipment and applications.
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THE MARKET. The Company considers every nuclear power plant in the
world to be a potential customer for the Nurescell Technology which, because of
its mechanical properties (including structural strength), can be used in
materials for construction of new nuclear facilities or in the retrofitting of
existing facilities. At this time, there are approximately 149 nuclear power
plants in the United States, of which approximately 40 are not currently in
operation. Of the operating nuclear power plants, approximately 50 are owned by
the DOE and the balance are owned by public and private utilities. There are
also currently approximately 360 nuclear power plants in the world which are not
located in the United States or Russia. Because accidents do occur at nuclear
power plants for a variety of reasons, management of the Company believes that a
cost-effective safety shield system for new and existing facilities is in great
demand.
Nurescell also believes that its products can play an important role
in the recovery and reuse of materials from existing nuclear warheads. As
nuclear arsenals in the U.S. and former Soviet Union are dismantled, this
application will grow in importance.
In light of the huge and steadily growing deposits of worldwide
nuclear waste and related materials (447,000 metric tons according to 1995
estimates), the properties of the Nurescell Technology are believed to have a
worldwide market as the means of correcting the existing problems with the
handling and storage of spent reactor fuel and various other radioactive
materials, such as uranium mill tailings and accelerator wastes.
Because of their special shielding needs, it is expected that nuclear
accelerator projects, as well as projects involving innovative fuels and defense
research applications, will find the Nurescell Technology to be an important
factor in implementing those projects.
GOVERNMENTAL REGULATION. In the United States, the nuclear power
industry is highly regulated under the jurisdiction of the DOE and the Nuclear
Regulatory Commission ("NRC"), with the NRC having primary responsibility for
enacting and enforcing regulations designed to ensure the safety of nuclear
power plants. That regulatory authority extends from construction to all phases
of operations. In particular, the NRC has the authority to require nuclear
power plants to utilize specific measures to ensure and enhance their safety.
In the rest of the world, regulatory oversight of nuclear power plants
is effected through a Nuclear Safety Committee which is comprised of
representatives from throughout the world.
COMPETITION. The number of competitors offering proprietary products
designed to accomplish the same or similar effects as the Nurescell Technology
include Lockheed Martin, which utilizes the ceramic silicon foam technology, and
SAE (France), which utilizes a concrete-iron technology, among others. Other
companies may currently have or may succeed in developing products superior to
the Nurescell Technology, or may more effectively market such other products,
either of which could substantially reduce the potential market for products
using the Nurescell Technology.
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MARKETING STRATEGY. At this time, the Company plans to divide its
major market into the following divisions:
- Reactor Spent Nuclear Fuel
- Department of Defense Special Projects
- EM-40 Environmental Management and Site Restoration Programs
- Specialized Advanced Accelerator Materials
- Low Level Nuclear Wastes
The Company's marketing strategy is to develop its products in
accordance with the specifications and design which will be required by the
NRC and DOE and, in some situations, the U.S. Department of Defense ("DOD").
The Company will then seek to present the Nurescell Technology to the NRC,
DOE and, as appropriate, the DOD, with emphasis on both the efficacy of the
technology and the cost savings which the technology will allow by reducing
downtime for maintenance. This presentation will be made with the intent of
having the NRC mandate that the Nurescell Technology be installed in all
nuclear power plants in the United States. The Company believes that
becoming the standard in the United States will then result in the Nurescell
Technology being accepted as the standard worldwide. The Company's marketing
organization structure will be based upon the following:
- The use of Company technical personnel with substantial
nuclear physics and engineering, field technical sales and
corporate product management experience at the corporate
level, each with a specific area of technical expertise.
- Field Technical Sales Representatives with successful,
in-depth experience in nuclear physics and engineering and
technical sales work located in those geographical areas
which will best serve the rapid development of the Company's
business.
- Presentations at nuclear power trade shows where independent
environmental engineering and consulting companies can be
made increasingly aware of the Nurescell Technology and the
unique applications that can serve their clients' needs.
If the Company is able to move ahead as planned, it expects to begin
involvement in a variety of nuclear markets by the end of 1999, including
commercial domestic and international nuclear plants, submarine-based nuclear
reactors, DOD and DOE nuclear waste site restoration projects and nuclear
accelerator materials.
PRODUCT MANUFACTURING AND INSTALLATION. At this time, samples of
Nurescell Technology products that are required by LLNL are being prepared by
Thermach Engineering, an experienced formulation laboratory. Once mass
production begins, the Company anticipates
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that a major United States chemical manufacturing company will be a contract
manufacturer of products incorporating the Nurescell Technology. The Company
has also established contacts in Israel with the Atomic Nuclear Commission for
the purpose of establishing a manufacturing capacity. For installation of its
products, the Company anticipates contracting with engineering firms to install
those products in nuclear power plants and other applications identified by the
Company for the encapsulation of nuclear materials. The Company does not
anticipate any difficulty in obtaining the ingredients needed to manufacture its
products.
INTELLECTUAL PROPERTY RIGHTS. At this time, a United States patent
has been applied for with respect to certain elements of the Nurescell
Technology (patent application No. 09/187,641). To date, no patents have been
issued pending the results of further research, testing and legal work. It is
anticipated that the ingredients of the Nurescell Technology will also be
manufactured under secrecy agreements. In addition, the Company will pursue
foreign patents and other U.S. and foreign protection of its intellectual
property to the extent appropriate under the circumstances.
PERSONNEL. The Company currently has five employees (all of whom
are full-time), three part-time consultants and a technical Board of Advisors
currently comprised of one member. It is anticipated that additional
employees will be hired as the needs of the Company require. It is also
anticipated that the Company will utilize third party contractors to handle
various of the Company's needs as they arise.
PLAN OF OPERATION. Because of its early stage of development, the
Company does not anticipate revenues with respect to the Nurescell Technology
(initially in the form of research grants) until at least the third quarter
of 1999, if at all. To date, all $658,000 of funding received by the Company
has been obtained from the sale of equity securities. See "Recent Sales of
Unregistered Securities." Of that amount, approximately $181,000 has been
spent on research and development activities with respect to the Nurescell
Technology. The Company is currently in the process of raising up to an
additional $342,500 from the sale of securities in a private offering under
Rule 504 of Regulation D under the Securities Act of 1933 (the "Pending
Offering"). If completed, the proceeds of the Pending Offering will be used
to continue testing of the Nurescell Technology by LLNL (which is estimated
to cost approximately $200,000), pursue the Company's pending patent
application and for general working capital. The Company anticipates that if
it raises the full amount remaining in the Pending Offering, those funds
should provide sufficient capital which, together with cash on hand, will
enable the Company to operate for approximately 12 months. The Company's
ability to continue as a going concern will also depend upon its ability to
raise additional capital from time to time until the Company can generate
revenues from the sale of its intended products which exceed the costs
associated with producing the products and operating the Company as a
business. At this time, the Company expects that it will need to raise at
least $2.7 million in additional funding (through research grants, debt
and/or equity financing) over the next 24 months in order to complete the
development of the Nurescell Technology and its
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proposed products. There can, however, be no guarantee that the Pending
Offering will be completed or that any additional required funding will be
available on terms favorable to the Company or its shareholders, if at all. If
funds are not available when needed, the Company may be required to curtail its
operations, which could have a material adverse effect on the Company's
business, operating results and financial condition.
ITEM 7: DESCRIPTION OF PROPERTY.
The Company leases its approximately 500 square foot executive offices
at 2030 Main Street, 13th Floor, Irvine, California pursuant to a sublease which
expires in May, 1999 and provides for rental payments of $4,025 per month. The
sublease includes the Company's right to use the furniture, fixtures, office
equipment and common facilities at that location. Should the Company be
required to relocate its offices when its sublease expires, management believes
that replacement space is readily available in the same general area.
ITEM 8: DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES.
Set forth below is information regarding the directors and executive
officers of the Company. The Company has no significant employees other than
those described below and there are currently no other persons under
consideration to become directors or executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William A. Wilson 84 Chairman of the Board (a Director
position)
Adrian A. Joseph 46 President
Rita M. Lavelle 50 Director and Vice President - Marketing
John R. Longenecker 45 Director and Vice President - Operations
Sharon Nitka 37 Director, Chief Financial Officer and
Secretary
</TABLE>
WILLIAM A. WILSON has been the Chairman of the Board of the Company
since its inception on May 12, 1998. Mr. Wilson has approximately fifty
years of business experience in both the financial and manufacturing fields
and is currently an advisor and consultant to various high technology and
financial companies. Mr. Wilson is the former Chairman of the Board of Web
Wilson Oil Tools, Inc. and San Vicente Investments Co., and a former member
of the Boards of Directors of Jorgensen Steel Company, Penzoil Company,
Disease Detection International, Western Energy Management, Inc., Incomnet,
Inc., National Registry Corporation, Orbit Technologies, Inc. and several
privately held companies. Mr. Wilson currently holds a Board seat with First
Pacific Networks, Inc., which has operated under chapter 11 bankruptcy
protection since 1997. He is also a director and corporate Secretary of
Tresis International, a newly-formed corporation in which Adrian A. Joseph is
the majority shareholder. Mr. Wilson was a delegate to several Republican
conventions, Chairman of the
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Presidential Personnel Selection Committee (Reagan Administration), Presidential
envoy to the Holy See (Vatican), first Ambassador to the Holy See (Reagan
Administration) and a trustee of President Reagan's personal trust. Mr. Wilson
holds a Bachelor of Science degree in Mechanical and Metallurgical Engineering
from Stanford University. Mr. Wilson devotes approximately 20% of his business
time to the Company.
ADRIAN A. JOSEPH, PH.D. has been the President of the Company since
its inception. Dr. Joseph holds a Ph.D. degree in nuclear physics from the
Israel Institute of Technology, which he earned in 1974. For 12 years prior to
the commencement of pre-organization work on the Company (which began in
February 1996), Dr. Joseph was the founder and chief scientist and Chairman of
the Board of Orbit Technologies Inc., a publicly traded company engaged in
developing materials to treat existing hazardous waste. Dr. Joseph resigned his
position with Orbit Technologies Inc. in February 1996, but remains a
shareholder of that company. Dr. Joseph has developed many diverse technologies
and holds 118 issued patents and has over 200 active patent applications on
file. Dr. Joseph's work has included metafusion (a process for the fusion of
metals at room temperature), low-cost titanium refining and extraction,
ultrasound technology for the reduction of viscosity in fluids, and technologies
in the coatings, plastics and foam areas. In 1994, he received an Honors Award
from the Euro-Asian Association of Physicists for High Achievement in Nuclear
Physics. Dr. Joseph also received his Bachelor of Science degree in Electronics
Engineering from the Israel Institute of Technology. Dr. Joseph devotes
essentially all of his business time to the Company.
RITA M. LAVELLE has been a director and Vice-President of the Company
since its inception. Since 1986, Ms. Lavelle has been the President of NuTECH
Enterprises, Inc., an environmental engineering and remediation company. From
1982 through 1983, Ms. Lavelle was appointed by President Ronald Reagan as the
Administrator of Hazardous Waste with the U.S. Environmental Protection Agency,
where she controlled a $2.5 billion budget directing the nationwide enforcement
and compliance efforts for U.S. hazardous waste handling and cleanup commonly
known as the Superfund. Prior thereto, Ms. Lavelle held positions which
included Director of Communications with Cordova Chemical and Aerojet, Director
of Marketing with Intercontinental and Continental Chemicals, Department
Information Officer with the California Department of Consumer Affairs, and
Publications Assistance in Governor Ronald Reagan's Administration in
California. Ms. Lavelle holds an MBA in Finance and Strategic Planning and
Marketing from Pepperdine University and a BA degree in Biology and Mathematics.
Ms. Lavelle devotes approximately 50% of her business time to the Company.
JOHN R. LONGENECKER has been a director and Vice-President of the
Company since its inception. Mr. Longenecker is also the President of
Longenecker & Associates, a management consulting firm with the high
technology and energy related businesses. Prior to the formation of
Longenecker & Associates in 1989, Mr. Longenecker was Chairman of General
Atomics International Services Corporation, a company which operates and
maintains nuclear power stations. From 1983 to 1987, Mr. Longenecker served
in the Reagan administration as the chief executive officer of the U.S.
uranium enrichment business in the DOE, and prior thereto worked in the
United States'
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nuclear reactor development program as the Director of Breeder Demonstration
Projects for the DOE. Mr. Longenecker received both his Bachelor of Science and
Master of Science degrees from Pennsylvania State University and is a member of
their Industrial Professional Advisory Council. Mr. Longenecker devotes
approximately 20% of his business time to the Company.
SHARON NITKA has been a director and the Chief Financial Officer and
Secretary of the Company since its inception and is the sister of Adrian A.
Joseph. During the last five years, Ms. Nitka has also worked as a consultant
for Nagila Foods, Inc. ("Nagila"), a company which, among other things, operates
restaurants and prepares pre-packaged food items. Ms. Nitka's primary focus for
Nagila has been the development of an effective marketing strategy, including
community public relations. Other services for Nagila have included an in-depth
analysis of the operations management, which included creating a new branch of
delivery services and transforming Nagila's manual process to computerized
systems. Ms. Nitka has also held a variety of administrative and management
positions with various other companies. From 1985 to 1990, Ms. Nitka served as
the financial administrator of Orbit Technologies Inc. and a programmer analyst
with Metafuse Limited, both of which are or were controlled by Adrian A. Joseph.
Ms. Nitka holds a Bachelor degree in computer science and business and devotes
approximately 60% of her business time to the Company.
Subject to prior resignation or removal, the Company's directors serve
in that capacity until the next annual meeting of shareholders or until their
successors are elected or appointed and duly qualified. Officers are appointed
by the Board of Directors and serve in that capacity until resignation or
removal. Except as noted above, there are no family relationships by blood,
marriage or adoption among any directors and/or executive officers of the
Company, and there are no arrangements or understandings between any director or
executive officer and any other person pursuant to which such director or
executive officer was selected for his or her office or position. Except as
noted above, within the past five years (i) no petition under the federal
Bankruptcy Act or any state insolvency law has been filed by or against any
executive officer or director of the Company, and no receiver, fiscal agent or
similar officer has been appointed by a court for the business or property of
any such persons, or any partnership in which any of such persons was a general
partner at or within the two years before the time of such filing, or any
corporation or business association of which any such person was an executive
officer at or within the past two years and (ii) no director or executive
officer of the Company has been convicted in a criminal proceeding (excluding
traffic violations and other minor offenses).
ITEM 9: REMUNERATION OF DIRECTORS AND OFFICERS.
COMPENSATION. The following table sets out the compensation paid on
a cash basis from inception to December 31, 1998 to (i) each of the Company's
three highest paid officers or directors and (ii) the Company's officers and
directors as a group:
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<TABLE>
<CAPTION>
NAME OR IDENTITY OF GROUP TITLE COMPENSATION(1)
- ------------------------- ----- ---------------
<S> <C> <C>
Adrian A. Joseph President $100,717(2)
Sharon Nitka Chief Financial Officer,
Secretary and Director $ 23,957(3)
William A. Wilson Director $ 20,333(4)
All officers and directors
as a group (5 persons) $169,159(5)
</TABLE>
_______________
(1) Does not include group life, health, hospitalization or other benefit plans
which do not discriminate in scope, terms or operation in favor of officers
or directors and which are available generally to all salaried employees.
(2) Mr. Joseph has also been issued options for 160,000 shares of Common Stock.
See "Security Ownership of Management and Certain Securityholders."
(3) Ms. Nitka has also been issued options for 60,000 shares of Common Stock.
See "Security Ownership of Management and Certain Securityholders."
(4) Mr. Wilson has also been issued options for 60,000 shares of Common Stock.
See "Security Ownership of Management and Certain Securityholders."
(5) As a group, the Company's officers and directors have also been issued
options for 400,000 shares of Common Stock. See "Security Ownership of
Management and Certain Securityholders."
STOCK OPTION PLAN. Under the Company's 1998 Stock Option Plan (the
"Option Plan"), all officers and directors of the Company, as well as its
employees and consultants, are eligible to be selected to participate. The
purpose of the Option Plan is to promote the interests of the Company by
providing participants with an inducement to maintain their status with the
Company and to further advance the interests of the Company. Options are
granted in consideration of things such as past and potential future
contributions to the Company. The Option Plan is administered by a Stock
Option Committee (the "Committee"), which consists of at least two directors
appointed by the Company's Board of Directors.
As of February 1, 1999, 300,000 options have been issued under the
Option Plan. The aggregate number of shares of Common Stock to be delivered
upon the exercise of all options granted under the Option Plan cannot exceed
360,000 shares. In the event of any merger, reorganization, recapitalization,
stock dividend, stock split or reverse split or other act or event which
effects a restructure of the Company's Common Stock (but not including the
issuance of additional shares of Common Stock or preferred stock), the total
number of shares covered by the Option Plan, the exercise price, and number
of shares covered by outstanding options granted pursuant to the Option
Plan, and the rights, preferences and privileges incident to such shares will
be appropriately adjusted as to any remaining options. Any shares covered by
options granted pursuant to the Option Plan which expire or are cancelled are
available for reissuance under the Option Plan.
The Committee determines the individuals to whom and the times at
which options are granted and the terms of, and number of shares subject to,
each option. The Committee also has the authority to construe and interpret
the Option Plan. There is no maximum or minimum number of shares which may be
subject to options granted to any one individual under the Option Plan. The
exercise price of the stock covered by each option is also determined by the
Committee; provided, however, that (i) as to incentive stock options, such
exercise price will not be less than an amount equal to 100% of the "fair
value" of the stock (as determined pursuant to the Option Plan) on the date
the option is granted (110% for options granted to persons who hold 10% or
more of the Company's Common Stock) and (ii) as to all other options, such
exercise price will not be less than an amount equal to 85% of the fair value
of the stock on the date the option is granted. Upon the exercise of an
option granted under the Option Plan, the exercise price is payable in full
at the time of exercise, either in cash, by check, in stock of the Company
valued at fair market value at the time of each such exercise or, in the
Committee's discretion, by delivery of a promissory note. Subject to the
express provisions of the Option Plan, the terms of each option granted under
the Option Plan, including the exercise price, manner of exercise, vesting
and duration of each option, shall be as specified in the applicable option
agreement between the Company and the option holder.
As a general proposition, if the option holder ceases, for any
reason, to be an employee of the Company, or a director of the Company, as
the case may be, the option holder will have a right thereafter to exercise
the option during a specified period set forth in the option agreement
between the Company and the option holder, which in the event of termination
due to death or permanent disability, will be no more than three years and
which, in all other cases, will be no more than one year.
Options granted under the Option Plan are not assignable or
transferable except by will or the laws of descent and distribution, and are
exercisable during the option holder's lifetime only by the option holder. No
options will be exercisable more than ten years after the date of grant
(five years for options granted to persons holding 10% or more of the
Company's Common Stock).
Upon the anticipated occurrence of certain specified events,
including a merger, consolidation or other transaction in which the Company
ceases to be an independent corporation, the Committee, in its discretion, may
provide that all options granted under the Option Plan will become
exercisable in full for a specified period prior to such event.
The Board of Directors of the Company or the Committee may amend,
suspend or terminate the Option Plan at any time. Unless terminated sooner,
the Option Plan will terminate on June 15, 2008 and no options may be granted
thereafter. No amendment, suspension or termination of the Option Plan will,
without the consent of the option holder, be made which would alter or impair
any rights or obligations under any option then outstanding. Upon the
dissolution or liquidation of the Company, the Option Plan will terminate,
and any option previously granted thereunder and not yet exercisable in full
will also terminate. In the event, however, that the Company is succeeded by
another corporation, the Option Plan and any remaining options granted
thereunder will be assumed by such successor corporation, subject to such
adjustments as may be necessary due to the capital structure of the successor
corporation.
COMPENSATION ARRANGEMENTS. On May 15, 1998, the Company entered
into a three-year employment agreement with Adrian A. Joseph. The employment
agreement automatically renews for succeeding terms of one year, subject to
the prior notification of termination by either the Company or Dr. Joseph.
Annual compensation pursuant to the employment agreement is $180,000 per
year, payable monthly, subject to annual increases at the discretion of the
Company's Board of Directors. Dr. Joseph is also to receive an annual bonus
equal to 10% of the amount of annual Company profits which exceeds $300,000
over the Company's prior year's profits. Although the employment agreement
includes non-disclosure covenants as to the Company's trade secrets, Dr.
Joseph is permitted to pursue other opportunities while serving as President
of the Company, but only with the consent of the Board of Directors.
The Company has also entered into an employment agreement with Sharon
Nitka. That agreement is terminable by the Company at any time, without cause,
and provides for an annual salary of $36,000 plus reimbursement of reasonable
expenses incurred in the furtherance of the Company's business.
The Company has entered into consulting agreements with William A.
Wilson, Rita M. Lavelle and John R. Longenecker, each of whom is a director of
the Company. Pursuant to those agreements (each of which is terminable by
either party on 30-days notice), the
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Company pays consulting fees of $2,000 per month (increasing to $4,000 per
month for Ms. Lavelle on March 1, 1999), plus reimbursement of
Company-approved expenses.
Except as noted above, the Company does not compensate its directors
for their services as such except for the reimbursement of expenses incurred in
attending Board of Directors meetings.
ITEM 10: SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS.
The following table sets forth the record ownership of the Company's
Common Stock (the Company's only class of voting stock) as of February 1, 1999
as to (i) each person or entity who owns more than 10% of any class of the
Company's securities (including those shares subject to outstanding options),
(ii) each person named in the table appearing in "Remuneration of Directors and
Officers" and (iii) all officers and directors of the Company as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF OWNER NUMBER OF SHARES OWNED(1) PERCENT OF CLASS (2)
- ------------------------- ------------------------- --------------------
<S> <C> <C>
Adrian A. and Dianna Joseph 7,889,000(3) 60.4%
2030 Main Street, 13th Floor
Irvine, California 92614
Sharon Nitka 350,000(3) 2.7%
2030 Main Street, 13th Floor
Irvine, California 92614
William A. Wilson 750,000(3) 5.8%
10101 Wilshire Blvd.
Los Angeles, California 90024
All officers and directors 9,889,000(3) 75.9%
as a group (5 persons)
</TABLE>
______________________
(1) To the Company's knowledge, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock owned by
them, subject to community property laws where applicable.
(2) Based on 13,031,500 shares of Common Stock outstanding, without
taking into account any shares issuable upon the exercise of outstanding
options.
(3) Does not include shares which can be obtained upon exercise of the options
described in the table below.
11
<PAGE>
Other than the Class "A" Common Stock Purchase Warrants, the Company
has no class of non-voting securities presently outstanding. See "Securities
Being Offered."
The following table sets forth the options, warrants and other rights
to purchase securities of the Company which were held as of February 1, 1999 by
(i) each person or entity who owns more than 10% of any class of the Company's
securities, (ii) each person named in the table appearing in "Remuneration of
Directors and Officers" and (iii) all officers and directors of the Company as a
group:
<TABLE>
<CAPTION>
TITLE AND AMOUNT
OF SECURITIES CALLED
FOR BY OPTIONS, EXPIRATION
NAME OF HOLDER WARRANTS OR RIGHTS(1) EXERCISE PRICE DATE
- -------------- --------------------- -------------- ----------
<S> <C> <C> <C>
Adrian A. Joseph 100,000 shares of Common $1.00/share Varies (2)
Stock
60,000 shares of Common $0.55/share Varies (3)
Stock
Sharon Nitka 60,000 shares of Common $0.50/share Varies (3)
Stock
William A. Wilson 60,000 shares of Common $0.50/share Varies (3)
Stock
All officers and 400,000 shares of Common $0.50/share, Varies (2)(3)
directors as a group Stock $0.55/share
(5 persons) and $1.00/share
</TABLE>
________________
(1) All options in this table are fully vested.
(2) Options are exercisable only during the term of Dr. Joseph's employment
agreement, subject to extension to June 1, 2001 under certain
circumstances.
(3) Options are exercisable until July 31, 2003 as to Dr. Joseph, and until
July 31, 2008 as to the other optionees, subject in each case to earlier
termination in the event of death, disability and certain other events.
ITEM 11: INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.
The following is a description of those transactions by the Company
since its inception or which are presently proposed in which (i) any Company
director, officer, promoter or greater than 10% shareholder (or a relative or
spouse thereof, or any relative of such spouse) has or is to have a direct or
indirect interest and (ii) the amount involved exceeds $50,000.
On June 12, 1998, the Company issued to Adrian A. Joseph (the
Company's President and majority shareholder) 10,000,000 shares of Common Stock
in return for his
12
<PAGE>
assignment of the Nurescell Technology which he developed. At that time, the
Company also paid Dr. Joseph approximately $34,000 for certain materials and
supplies owned by him in connection with the development of that technology.
The Company has also entered into employment agreements with Dr.
Joseph and Sharon Nitka (the Company's Chief Financial Officer and Secretary and
a director), as described above in "Remuneration of Directors and Officers," and
has granted stock options to Dr. Joseph and Ms. Nitka, as described in "Security
Ownership of Management and Certain Securityholders."
The Company has entered into consulting agreements with Rita M.
Lavelle, William A. Wilson and John R. Longenecker (each of whom is a director),
as described above in "Remuneration of Directors and Officers." The Company has
also granted stock options to each of those persons, as described in "Security
Ownership of Management and Certain Securityholders."
ITEM 12: SECURITIES BEING OFFERED.
The Company's Articles of Incorporation, as amended, authorize the
Company to issue 50,000,000 shares of Common Stock, par value $.0001 per
share, and 1,000,000 shares of Preferred Stock, par value $.0001 per share.
As of February 1, 1999, there were 13,031,500 shares of Common Stock issued
and outstanding, subject to increase depending on the results of the Pending
Offering. See "Description of Business - Plan of Operation." None of the
Company's 1,000,000 shares of Preferred Stock are issued or outstanding.
COMMON STOCK. On all matters submitted to a vote of the shareholders, each
holder of Common Stock has the right to one vote for each share held of record.
Subject to preferences that may be applicable to any outstanding Preferred
Stock, holders of Common Stock are entitled to receive ratably such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preferences of any
outstanding shares of Preferred Stock. Holders of Common Stock have no
preemptive rights and no right to convert their Common Stock into any other
securities. There are no redemption or sinking fund provisions applicable to
the Common Stock, and all outstanding shares of Common Stock are fully paid and
nonassessable.
Nevada law does not require shareholder approval for the issuance of
authorized but unissued shares of Common Stock. Such issuances may be for a
variety of corporate purposes, including future private and public offerings to
raise additional capital or to facilitate corporate acquisitions.
PREFERRED STOCK. The Company currently has no plans to issue any Preferred
Stock. The
13
<PAGE>
Company's Board of Directors does, however, have the authority, without action
by the shareholders, to issue all or any portion of the authorized but unissued
Preferred Stock in one or more series and to determine the voting rights,
preferences as to dividends and liquidation, conversion rights, and other rights
of such series. The Preferred Stock, if and when issued, may carry rights
superior to those of the Common Stock.
The Company considers it desirable to have Preferred Stock available to
provide increased flexibility in structuring possible future financings and in
meeting corporate needs which may arise. If opportunities arise that would make
it desirable to issue Preferred Stock through either public offerings or private
placements, the provision for Preferred Stock in the Company's Articles of
Incorporation would avoid the possible delay and expense of a shareholders'
meeting, except as may be required by law or regulatory authorities. Issuance
of the Preferred Stock could result, however, in a series of securities
outstanding that would have certain preferences with respect to dividends and
liquidation over the Common Stock which would result in dilution of the income
per share and net book value of the Common Stock. Issuance of additional Common
Stock pursuant to any conversion right which may be attached to the terms of any
series of Preferred Stock may also result in the dilution of the net income per
share and the net book value of the Common Stock. The specific terms of any
series of Preferred Stock will depend primarily on market conditions, terms of a
proposed acquisition or financing, and other factors existing at the time of
issuance. Furthermore, it is not possible at this time to determine in what
respect a particular series of Preferred Stock will be superior to the Company's
Common Stock or any other series of Preferred Stock which the Company may issue.
The Board of Directors does not intend to issue any Preferred Stock except on
terms which it deems to be in the best interest of the Company and its
shareholders.
WARRANTS. Pursuant to the Pending Offering, the Company is in the
process of issuing Class "A" Common Stock Purchase Warrants (the "Class A
Warrants") and Class "B" Common Stock Purchase Warrants (the "Class B
Warrants"). As of February 1, 1999, only 31,500 Class A Warrants were
outstanding. Class A Warrants are exercisable commencing the day after the
first anniversary of a closing of the Pending Offering and expire one year
thereafter (or earlier upon certain events described below if not exercised
prior thereto). The holders of the Class A Warrants are entitled to purchase
one share of Company Common Stock and one Class B Warrant for an aggregate
exercise price of $4.00 per Class A Warrant exercised. Class B Warrants are
also exercisable for a one year period, beginning on the date the Class B
Warrant is issued (subject to earlier expiration upon the occurrence of
certain events, as described below).
Upon surrender of each Class A Warrant with the subscription form duly
executed, together with payment of the exercise price, the holder will be
entitled to receive a certificate for one share of Common Stock and one Class B
Warrant. Likewise, upon surrender of a Class B Warrant with the subscription
form duly executed, together with the payment of $3.00 per Class B Warrant
exercised, the holder will be entitled to receive a certificate for one share of
Common Stock. The shares of Common Stock and the Class B Warrants issued
pursuant to the exercise of the Class A Warrants and Class B Warrants
(collectively, the "Warrants") will be "restricted
14
<PAGE>
securities," as that term is used in Rule 144 under the Securities Act of 1933
(the "Securities Act").
In case of any reorganization, consolidation, merger, liquidation or
dissolution of the Company, the Warrantholders will be given 30-days notice of
such impending event. Exercise of the Warrants at any time prior to such
impending event will entitle the holder to receive the stock or other securities
or property which shareholders of record will receive upon consummation of such
event (in lieu of the stock or the securities or property otherwise receivable
upon the exercise of the Warrants). Failure to exercise after such notice and
prior to the consummation of the corporate transaction shall result in the
automatic expiration of the unexercised Warrants. In the event of a dividend of
the Company Common Stock or a split thereof, the exercise price and number of
shares purchasable upon exercise of the Warrants will be adjusted
proportionately so as to prevent dilution to a Warrantholder.
OPTIONS. The Company has granted options to purchase an aggregate of
400,000 shares of Common Stock to its officers and directors as described above
in "Security Ownership of Management and Certain Securityholders." The only
other Company options presently outstanding are those granted to an initial
investor which provide for the purchase of up to 24,000 shares of Common Stock
at $1.00 per share at any time after November 10, 1999.
APPLICATION OF CALIFORNIA LAW. Under California Corporations Code Section
2115 ("Section 2115"), a corporation that is not incorporated in California
(such as the Company) will still be subject to certain provisions under
California corporate law if, among other things, over one-half of its
outstanding voting securities are held of record by California residents and it
has the requisite level of property holdings, payroll and sales in California.
If the requirements are met, the provisions of the California Corporations Code
which are applicable include: (i) Section 303 (relating to removal of directors
without cause); (ii) Section 304 (relating to removal of directors by court
proceedings); (iii) Section 309 (relating to directors' standard of care); (iv)
Section 317 (indemnification of directors, officers and others); (v) Sections
500 through 505, inclusive (relating to limitations on corporate distributions
in cash or property); (vi) Section 506 (relating to liability of a shareholder
who receives an unlawful distribution; (vii) Section 708, subdivisions (a), (b)
and (c) (relating to a shareholder's right to cumulate votes at an election of
directors); (viii) Section 710 (relating to supermajority vote requirements);
(ix) Chapter 13, commencing with Section 1300 (relating to dissenters' rights);
and (x) Sections 1500 and 1501 (relating to records and reports). Some of the
applicable provisions may provide shareholder rights which are greater than
those available under Nevada law, while others may provide lesser rights.
Because the foregoing is only a summary and is not intended to, and does not,
constitute a complete description of shareholders' rights under California law,
each person is urged to consult his, her or its own counsel with respect to such
rights and how they may differ from the rights available under Nevada law.
Based on the circumstances known at this time, it appears that the Company
currently meets the requirements for application of Section 2115. If such
requirements continue to be met
15
<PAGE>
on the date that determination of the applicability of Section 2115 is made
under California law, it is expected that the Company will become subject to the
specified California corporate law provisions commencing on January 1, 2001.
Thereafter, such corporate law provisions will continue to apply until the end
of the fiscal year in which the Company files a report showing that at least one
of the criteria for application of Section 2115 is no longer being met.
TRANSFER AGENT. The transfer agent and registrar for the Common Stock and
the Warrants is U.S. Stock Transfer Corporation, Glendale, California.
PART II
ITEM 1: MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
At the present time, there is no public trading market for the
Company's securities. The Company is, however, currently seeking clearance for
quotation in the "Pink Sheets" of the National Quotations Bureau. The Company
also intends to seek to have its securities quoted on the OTC Bulletin Board
after this Registration Statement becomes effective. Should either quotation
forum become available, the prices thereon will represent quotations between
dealers, without adjustment for retail mark-up, mark-down or commission, and
will not necessarily represent actual transactions.
The Company has not paid any cash dividends on its Common Stock since
its incorporation and anticipates that, for the foreseeable future, earnings, if
any, will continue to be retained for use in its business. As of February 1,
1999, the number of record holders of the Company's Common Stock was 187.
ITEM 2: LEGAL PROCEEDINGS.
The Company is not currently a party to any legal proceedings and, to
the knowledge of management, there is no litigation threatened by or against the
Company.
ITEM 3: CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS.
None.
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES.
On May 15, 1998, the Company privately issued options to purchase
100,000 shares of Common Stock at $1.00 per share to Adrian A. Joseph (the
Company's President) as part of his employment agreement with the Company.
Based on Dr. Joseph's relationship with the Company, the issuance was made
pursuant to the registration exemption under Section 4(2)
16
<PAGE>
of the Securities Act.
On May 18, 1998, the Company privately issued a total of 2,500,000
shares of Common Stock to Sharon Nitka, William A. Wilson, Rita M. Lavelle and
John R. Longenecker (each of whom was (and is) a director and/or officer of the
Company), as well as The Foundation Group (a "sophisticated investor"), for a
total of $2,500 in cash. Based on each investor's relationship with the
Company, the issuance was made pursuant to the registration exemption under
Section 4(2) of the Securities Act.
On June 12, 1998, the Company privately issued 10,000,000 shares of
Common Stock to Adrian A. Joseph in return for the transfer to the Company of
the Nurescell Technology. Based on Dr. Joseph's relationship with the Company,
the issuance was made pursuant to the registration exemption under Section 4(2)
of the Securities Act.
Between August 12 and September 18, 1998, the Company privately
issued a total of 498,000 shares of Common Stock to 42 persons for a total of
$498,000 in cash. All investors met certain suitability standards imposed by
the Company and were considered to be "sophisticated investors." Based on
those suitability standards and the disclosures provided to the investors,
the issuance was made pursuant to the registration exemption under Rule 504
of Regulation D under the Securities Act.
On July 31, 1998, in recognition of their efforts on behalf of the
Company, the Company privately issued options to purchase 60,000 shares of
Common Stock at $0.55 per share to Adrian A. Joseph and options to purchase
another 240,000 shares at $0.50 per share to Sharon Nitka, William A. Wilson,
Rita M. Lavelle and John R. Longenecker. Based on the optionees'
relationship with the Company, the issuance was made pursuant to the
registration exemption under Rule 701 of the Securities Act.
Commencing September 18, 1998, the Company began a second private
offering (the "Pending Offering" described above in "Description of Business
- -Plan of Operation") of a total of 100,000 units (each unit consisting of one
share of Common Stock and one Class A Warrant) for $5.00 per unit. That
offering is ongoing and, through February 1, 1999, the Company has issued a
total of 31,500 units to 11 persons for a total of $157,500 in cash. All
investors must meet certain suitability standards imposed by the Company and
be considered "sophisticated investors." Based on those standards and the
disclosures provided to investors, the offering is being made pursuant to the
registration exemption under Rule 504 of Regulation D under the Securities
Act.
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Nevada law, director immunity from liability to a corporation or
its shareholders for monetary liabilities applies automatically unless it is
specifically limited by a corporation's articles of incorporation (which is not
the case with the Company's Articles of Incorporation). Excepted from that
immunity are: (i) a willful failure to deal fairly with the
17
<PAGE>
corporation or its shareholders in connection with a matter in which the
director has a material conflict of interest; (ii) a violation of criminal law
(unless the director had reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her conduct was unlawful);
(iii) a transaction from which the director derived an improper personal profit;
and (iv) willful misconduct.
Under certain circumstances, Nevada law provides for indemnification
of the Company's officers, directors, employees and agents against liabilities
that they may incur in such capacities. In general, any officer, director,
employee or agent may be indemnified against expenses, fines, settlements or
judgments arising in connection with a legal proceeding to which such person is
a party, if that person's actions were in good faith, were believed to be in the
Company's best interest, and were not unlawful. Unless such person is
successful upon the merits in such action, indemnification may be awarded only
after a determination by independent decision of the Board of Directors, by
legal counsel, or by a vote of the shareholders, that the applicable standard of
conduct was met by the person to be indemnified.
The circumstances under which indemnification is granted in connection
with an action brought on behalf of the Company is generally the same as those
set forth above; however, with respect to such actions, indemnification is
granted only with respect to expenses actually incurred in connection with the
defense or settlement of the action. In such actions, the person to be
indemnified must have acted in good faith and in a manner believed to have been
in the Company's best interest, and must not have been adjudged liable for
negligence or misconduct.
At this time, the Company has also entered into an indemnification
agreement with each of its directors and officers. In the future,
indemnification may also be granted pursuant to the terms of Bylaw provisions
that may be adopted, or pursuant to a vote of shareholders or directors. The
statutory provisions also grant the Company the power to purchase and
maintain insurance which protects its officers and directors against any
liabilities incurred in connection with their services in such positions, and
such a policy may be obtained by the Company.
The foregoing is only a summary description and is qualified in its
entirety by reference to the applicable Nevada statutes. The foregoing may also
be affected by the possible application of certain California statutes, as
described above in "Securities Being Offered - Application of California Law."
18
<PAGE>
PART F/S
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountant . . . . . . . . . . . . . . . . . . . . . . . . .F-2
Balance Sheet as of September 30, 1998 . . . . . . . . . . . . . . . . . . . . . .F-3
Statement of Operations for the period from
May 12, 1998 (date of inception) to September 30, 1998 . . . . . . . . . . . . .F-4
Statement of Changes in Stockholders' Deficit for the period
from May 12, 1998 (date of inception) to September 30, 1998. . . . . . . . . . .F-5
Statement of Cash Flows for the period from May 12, 1998
(date of inception) to September 30, 1998 . . . . . . . . . . . . . . . . . . . .F-6
Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .F-7
</TABLE>
F-1
<PAGE>
RONALD L. JAMIESON, CPA
CERTIFIED PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------------
4281 Katella Ave, Suite 117, Los Alamitos, CA 90720
(714)821-9690 * (562)598-8549 * Fax (714)821-9286
October 6, 1998
Except for Note (2, 7, 8 & 10) as to which the date is December 28, 1998
To the Board of Directors
Nurescell Inc.
Irvine, CA 92614
I have audited the accompanying balance sheet of Nurescell Inc. (a development
stage company) as of September 30, 1998, and the related statements of
operations, stockholders' deficit, and cash flows for the period from May 12,
1998 (inception) to September 30, 1998. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nurescell as of September 30,
1998, and the results of its operations and its cash flows for the period from
May 12, 1998 (inception) to September 30, 1998, in conformity with generally
accepted accounting principles.
As discussed in Notes 7, 8 and 10 to the financial statements, the September 30,
1998 financial statements have been restated to reclassify and/or change the
manner of presentation of certain accounts and to correct certain mechanical
errors in the balance sheet as previously presented. In addition, as discussed
in Note 2 to the financial statements, the carrying value of certain intangible
assets has been restated to more accurately reflect the underlying technology
acquisition cost.
/s/ Ronald L. Jamieson
Ronald L. Jamieson, CPA
F-2
<PAGE>
NURESCELL INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, 1998
<TABLE>
<CAPTION>
ASSETS
------
<S> <C> <C>
CURRENT ASSETS
Cash $295,845
Loans - officers 20,417
----------
Total current assets $316,262
PROPERTY - AT COST
Property and equipment 46,952
Less accumulated depreciation (1,643)
----------
Total property and equipment 45,309
OTHER ASSETS
Deposits 3,000
Intangibles 15,000
Organizational cost net of amortization 39,490
----------
Total other assets 57,490
----------
TOTAL ASSETS $419,061
----------
----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES
Accounts payable $22,968
Accrued salaries 3,000
Payroll taxes payable 7,854
----------
Total current liabilities $33,822
STOCKHOLDERS' DEFICIT
Common stock; $.0001 par, 50,000,000
shares authorized, 13,017,800 shares issued
and outstanding 1,302
Additional paid in capital 608,198
Less: Stock subscription receivable (17,000)
Deficit accumulated during the development
stage (207,261)
----------
Total stockholders' deficit 385,239
----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $419,061
----------
----------
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
NURESCELL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
Period from May 12, 1998 (date of inception) to September 30, 1998
<TABLE>
<S> <C>
REVENUE $ -
EXPENSES
Amortization 367
Automobile expense 416
Bank charges 78
Chemicals & supplies 15,414
Computer repair 385
Consulting expense 18,487
Contributions 2,500
Depreciation 1,643
Directors fees 4,000
Equipment rental 57
Insurance - medical 7,281
Legal & accounting 8,710
Office expense 4,447
Office salaries 35,060
Officer compensation 70,449
Other 85
Outside services 559
Printing & reproduction 5,075
Rent 16,801
Taxes - payroll 8,780
Telephone 1,381
Travel 5,286
---------
Total expenses 207,261
---------
NET LOSS $(207,261)
---------
---------
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
NURESCELL INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
Period from May 12, 1998 (date of inception) to September 30, 1998
<TABLE>
<CAPTION>
Additional Stock
Common Stock Paid - In Subscription Accumulated
Shares Amount Capital Receivable Deficit
------------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Stock issued for:
Cash - Founding Shareholders 2,500,000 $ 250 $ 2,250
Technology agreement 10,000,000 1,000 9,000
Cash - $1 per share 498,000 50 497,950
Cash - $5 per share 19,800 2 98,998
Stock subscription receivable $ (17,000)
Net Loss $ (207,261)
------------- ----------- ------------ ------------- ------------
BALANCE AT SEPTEMBER 30, 1998 13,017,800 $ 1,302 $ 608,198 $ (17,000) $ (207,261)
------------- ----------- ------------ ------------- ------------
------------- ----------- ------------ ------------- ------------
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
NURESCELL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Period from May 12, 1998 (date of inception) to September 30, 1998
<TABLE>
<S> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss ($207,261)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 367
Depreciation 1,643
Changes in assets and liabilities:
Accounts payable 22,968
Accrued salaries 3,000
Payroll taxes payable 7,854
Deposits (3,000)
Organizational cost (39,857)
----------
NET CASH USED IN OPERATING ACTIVITIES ($214,286)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment (46,952)
Acquisition of intangibles (15,000)
----------
NET CASH FROM INVESTING ACTIVITIES (61,952)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 592,500
Loans - officers (20,417)
----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 572,083
----------
NET INCREASE IN CASH 295,845
CASH AT BEGINNING OF PERIOD 0
----------
CASH AT END OF PERIOD $295,845
----------
----------
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
NURESCELL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
NATURE OF BUSINESS
Nurescell Inc. (the "Company") was incorporated on May 12, 1998, pursuant
to the laws of the State of Nevada. The Company is a development stage
enterprise which is engaged in further research, development and testing of
its proprietary Nurescell radiation shielding technology. The Company has
just started and is in the start-up and development stage and has no sales
or revenues.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Expenditures for maintenance and
repairs are charged to operations as incurred while renewals and
betterments are capitalized. Depreciation of furniture, fixtures and
equipment is computed using the straight-line method. Estimated useful
lives for reporting purposes are as follows:
<TABLE>
<S> <C>
Furniture, fixtures and equipment 5 to 7 years
</TABLE>
OTHER ASSETS
Other assets consist of Deposits, Intangible assets and Organizational
cost. Organization cost include all costs associated with the Company's
incorporation and initial start-up. These costs are being amortized on a
straight-line basis over a five (5) year period.
Intangible assets principally consist of the cost of technology and similar
assets acquired. Once the technology has been placed into commercial use,
all intangible asset costs will be amortized over their estimated useful
lives.
CASH EQUIVALENTS
Cash and cash equivalents for the statement of cash flows include cash and
cash on deposit.
CONCENTRATION OF CREDIT RISK
The Company maintains its cash balances in one financial institution which
exceeds federally insured limits. The financial institution is insured by
the Federal Deposit Insurance Corporation up to $100,000.
2. INTANGIBLE ASSETS
On June 12, 1998, the Company entered into a Sale of Technology
Agreement ("Agreement") with Dr. Adrian Joseph (now a Director and
Officer of the Company) whereby the Company acquired all rights, title
and interest in a new generation of flexible containment material
("Nuresfoam") for fissionable nuclear material ("Nurescell Technology").
The Nurescell Technology is based, in part, on prior patented
technology, however the Nurescell Technology itself has not yet been
patented nor trademarked. An U.S. patent has been applied for with the
U.S. Patent Office, U.S. Patent Application 09/187,641.
F-7
<PAGE>
NURESCELL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONT
As consideration for the sale of the Nurescell Technology, Dr. Joseph
received 10,000,000 shares or 80% of the Company's then outstanding
$.0001 par value common stock. The transfer of the Nurescell Technology
was intended to be a tax-free exchange in accordance with Internal
Revenue Code Section 351. The Agreement stated that the Company valued
the Technology at $5,000,000, however, no independent valuation of the
technology has yet been obtained. Consequently, the Nurescell Technology
has been recorded at nominal value of $10,000 in the September 30, 1998
restated financial statements. The technology had been previously
recorded with no value.
3. COMMITMENTS
OPERATING LEASES.
The Company leases office facilities under an operating sublease that
require minimum monthly payments of $3,719. The rent expense for the period
ended September 30, 1998 was $16,804.
The estimated future minimum lease payments as of September 30, 1998 are as
follows:
<TABLE>
<CAPTION>
Year Ending December 31,
<S> <C> <C>
1998 $ 11,157
1999 19,817
--------
Total $ 30,974
--------
--------
</TABLE>
4. STOCK OPTIONS
Effective June 15, 1998, the stockholders approved an Incentive Stock
Option Plan granting to any Director, Officer, Employee or Consultant to
the Company options to purchase Company common stock over a ten year
period, at the fair market value at time of grant. The aggregate number of
common shares of the Company which may be granted under the plan is 360,000
shares. No options were granted or exercised as of September 30, 1998.
5. STOCK WARRANTS
Effective September 15, 1998 the stockholders approved a plan to issue
units consisting of one share of Common Stock (the "Common Stock") and one
Class "A" Common Stock Purchase Warrant (the "Class A Warrants") of the
Company.
The Class "A" Warrants are exercisable into one (1) share of Common Stock
and one (1) Class "B" Common Stock Purchase Warrant (the "Class "B"
Warrant") commencing the day immediately after the first anniversary of the
closing of the offering (the "A" Exercise Date") and have an exercise price
of $4.00. The Class "A" Warrants expire on the first anniversary of the "A"
Exercise Date (the "A" Expiration Date"). The Class "B" Warrants are
exercisable into one (1) share of Common Stock commencing immediately upon
their issuance (the "B" Exercise Date") and have an exercise price of
$3.00 per share of Company Common Stock. The Class "B" Warrants expire on
the first anniversary of the "B" Exercise Date.
F-8
<PAGE>
NURESCELL INC
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONT.
Prior to permitting the exercise of either the Class "A" or Class "B"
Warrants, the Company will be required to either register the underlying
Common Stock or seek an exemption from registration under both federal and
state law. The Common Stock and the Class A Warrants are immediately
detachable.
The Units are being offered on a continuing basis without registration
under federal law and either with registration or pursuant to exemptions
under state law. The Units may be restricted with respect to their
transferability depending upon in which state the Units are sold. Although
a secondary market is anticipated to develop for the shares of Common Stock
which are a part of the Units, there can be no assurance that a secondary
market will in fact develop.
6. INCOME TAXES
For federal income tax purposes, approximately $207,261 of net operating
loss carryforwards exist to offset future taxable income. These
carryforwards expire in 2014. No tax benefit has been reported in the
accompanying financial statements, however, because management believes
that there is at least a 50% chance that the carryforwards will expire
unused. Accordingly, the $89,122 tax benefit of the cumulative
carryforwards has been offset by a valuation allowance of the same
amount.
7. COMMON STOCK
50,000,000 shares of .0001 par value common stock are authorized.
13,017,800 shares are issued and outstanding at September 30, 1998.
8. STOCKHOLDERS' DEFICIT
Over the period as a development stage enterprise the Company has issued
stock in exchange for nonmonetary consideration. 10,000,000 shares were
issued in exchange for proprietary rights to certain technology, which was
assigned a value of $10,000 (see note 2).
The Stock subscription receivable consists of amounts due from two
shareholders that were issued stock but for which actual payment had not
been received as of September 30, 1998. Payment in full of this receivable
occurred in November 1998.
9. RELATED PARTIES
The Company has made an unsecured, 3% interest bearing loan of $20,000 due
within twelve months from its officers
10. CHANGE IN MANNER OF PRESENTATION
The September 30, 1998 financial statements have been restated to
reclassify Stock subscription receivable, previously reported as a current
asset, as a contra-equity account. In addition, Additional paid-in-capital
has been added to the Stockholders' deficit section of the Balance Sheet,
and correspondingly in the Statement of Stockholders' Deficit, to
accurately reflect the amount of common stock issued above its stated par
value. Finally, certain mechanical errors in the Balance Sheet have also
been corrected.
F-9
<PAGE>
PART III
ITEMS 1 AND 2. INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS.
The following exhibits are included as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2.1 Articles of Incorporation, as amended
2.2 Bylaws
3.1 Form of Class "A" Common Stock
Purchase Warrant Certificate
3.2 Form of Class "B" Common Stock
Purchase Warrant Certificate
6.1 Employment Agreement between the
Company and Adrian A. Joseph, Ph.D.
dated May 15, 1998
6.2 Sale of Technology between the Company
and Adrian A. Joseph dated June 12, 1998
6.3 Employment Agreement between the
Company and Sharon Nitka dated
June 1, 1998
6.4 Consulting Agreement between the
Company and John Longenecker
dated June 26, 1998
6.5 Consulting Agreement between the
Company and William A. Wilson dated
June 10, 1998
6.6 Consulting Agreement between the Company
and Rita Lavelle dated June 1, 1998
6.7 Form of Stock Option Agreement between the
Company and its officers and directors
6.8 1998 Stock Option Plan
6.9 Form of Indemnification Agreement between
the Company and its officers and directors
</TABLE>
III - 1
<PAGE>
<TABLE>
<S> <C>
12.1 Consent of Auditor
27 Financial Data Schedule
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
NURESCELL INC.
By: /s/ ADRIAN A. JOSEPH
-------------------------------
Adrian A. Joseph, President
Dated: February 11, 1999
III - 2
<PAGE>
ARTICLES OF INCORPORATION
OF
NURESCELL INC.
(PURSUANT TO THE GENERAL CORPORATION LAW OF THE STATE OF NEVADA)
================================================================================
The undersigned, being the person hereinafter named as incorporator, for
the purpose of establishing a corporation under the provisions and subject to
the requirements of Title 7, Chapter 78 of the Nevada Revised Statutes
(hereinafter referred to as the General Corporation Law of the State of Nevada,
do hereby adopt and make the following Articles of Incorporation:
FIRST: The name of the corporation (hereinafter called the "Corporation")
is
Nurescell Inc.
SECOND: The name and address of the resident agent of the Corporation is:
GKL Statutory Agent & Filing Services, Inc.
1100 East William Street, Suite 207
Carson City, Nevada 89701
THIRD: The purpose of the corporation is to engage in any lawful activity
for which corporations may be organized under the General Corporation Law of the
State of Nevada.
FOURTH: The corporation is authorized to issue two classes of shares to be
designated Common Stock ("Common Stock") and Preferred Stock ("Preferred
Stock"). The total number of shares of stock which the Corporation shall have
authority to issue is 16,000,000 of which 15,000,000 shares shall be Common
Stock, $.0001 par value and 1,000,000 shares shall be Preferred Stock, $.0001
par value, amounting in the aggregate to $1,600.
The Board of Directors is authorized without further action by
stockholders, subject to the limitations prescribed by law and the provisions of
this Article Fourth, to provide for the issuance of the Preferred Stock in one
or more series, and by filing a certificate pursuant to the applicable laws of
the State of Nevada, to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers, preferences
and rights of each such series and the qualifications, limitations or
restrictions thereof. The authority of the Board of Directors with respect to
each such series shall include, but shall not be limited to, the determination
of the following:
1
EXHIBIT 2.1
<PAGE>
(a) the number of shares constituting that series and the
distinctive designation of that series;
(b) the dividend rate, if any, on the shares of that series,
whether dividends shall be cumulative, and, if so, from which date or dates, and
the relative priority, if any, of payment of dividends on shares of that series;
(c) whether that series shall have voting rights, in addition to
the voting rights expressly required by law, and, if so, the terms of such
voting rights;
(d) whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including provisions for
adjustment of the conversion rate in such events and the Board of Directors
shall determine;
(e) whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per share
payable in the case of redemption, which amount may vary under different
conditions and at different redemption dates;
(f) whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms and
amount of such sinking fund;
(g) the rights of the shares of that series in the event of a
voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of payment of shares
of that series; and
(h) any other relative rights, preferences and limitations of
that series.
Unless the Board of Directors otherwise provides in the resolution
establishing a series of Preferred Stock, upon repurchase by the Corporation,
redemption or conversion, the shares of Preferred Stock shall revert to
authorized but unissued shares and may be reissued as shares of any series of
Preferred Stock.
In case the stated dividends and the amounts payable on liquidation
are not paid in full, the shares of all series of the Preferred Stock shall
share ratably (a) in the payment of dividends, including cumulations, if any,
in accordance with the sums which would be payable on such shares if all
dividends were declared and paid in full, and (b) in any distribution of
assets other than by way of dividends, in accordance with the sums which
would be payable in such distribution if all sums payable were discharged in
full.
The holders of Preferred Stock shall be entitled to receive when and
as declared by the Board of Directors but only out of assets legally available
for the payment of dividends, cash dividends at the annual rate for each series
fixed by the Board of Directors at the time of the original authorization of the
issue of the shares of such series.
2
<PAGE>
FIFTH: The governing board of the Corporation shall be styled as a "Board
of Directors" and a member of the Board shall be styled as a Director.
The number of members constituting the first Board of Directors of the
corporation is one (1); and the name and the post office address of said member
is as follows:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Adrian A. Joseph P.O. Box 3933
Beverly Hills, CA 90212
</TABLE>
The number of directors of the corporation may be increased or decreased in
the manner provided in the By Laws of the corporation; provided, that the number
of directors shall never be less than one (1) nor more than five (5).
SIXTH: The name and the post office address of the incorporator signing
these Articles of Incorporation is as follows:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Eric I. Michelman 2301 Dupont Dr., Ste. 530
Irvine, California 92612
</TABLE>
SEVENTH: The Corporation shall have perpetual existence.
EIGHTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by the General Corporation Law
of the State of Nevada, as the same may be amended and supplemented.
NINTH: The Corporation reserves the right to amend, alter, change, or
repeal any provision contained in these Articles of Incorporation in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation this 12th day of May, 1998.
/s/ Eric I. Michelman
-----------------------------------
Eric I. Michelman, Incorporator
3
<PAGE>
J. PAUL DAINKO
[SEAL] COMM. #1149583
NOTARY PUBLIC-CALIFORNIA
ORANGE COUNTY
MY COMM. EXPIRES AUG. 2, 2001
STATE OF CALIFORNIA )
) SS.:
COUNTY OF ORANGE )
On this 12th day of May, 1998, personally appeared before me, a Notary
Public in and for the State and County aforesaid, ERIC I. MICHELMAN, known to me
and to be the person described in and who executed the foregoing Articles of
Incorporation of Nurescell Inc., and who acknowledged to me that he executed
this same freely and voluntarily and for the uses and purposes therein
mentioned.
WITNESS my hand and official seal, the day and year first above written.
/s/ J. PAUL DAINKO
------------------------------
Notary Public
J. PAUL DAINKO
[SEAL] COMM. # 1149583
NOTARY PUBLIC-CALIFORNIA
ORANGE COUNTY
MY COMM. EXPIRES AUG. 2, 2001
(Notarial Seal)
4
<PAGE>
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
NURESCELL INC.
(PURSUANT TO SECTION 78.390 OF
THE GENERAL CORPORATION LAW OF NEVADA)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The undersigned, Adrian A. Joseph, being the President and Sharon Nitka,
Secretary of Nurescell Inc. (the "Corporation") do hereby certify that:
1. The Articles of Incorporation is hereby amended to increase the number
of authorized shares of Common Stock of the by striking only the first paragraph
of Article FOURTH in its entirety and replacing therefor:
"FOURTH: The corporation is authorized to issue two classes of
shares to be designated Common Stock ("Common Stock") and Preferred Stock
("Preferred Stock"). The total number of shares of stock which the
Corporation shall have authority to issue is 51,000,000 of which
50,000,000 shares shall be Common Stock, $.0001 par value and 1,000,000
shares shall be Preferred Stock, $.0001 par value, amounting in the
aggregate to $5,100."
The remaining paragraphs of Article FOURTH to remain unaltered.
2. The foregoing Amendment to the Articles of Incorporation was first
authorized by the unanimous written consent of the Board of Directors pursuant
to Section 78.315(2) of the General Corporation Law of Nevada.
3. The foregoing Amendment to the Articles of Incorporation was
authorized by the stockholders of the Corporation by the unanimous written
consent of the stockholders of the Corporation's Common Stock in accordance
with Section 78.320(2) of the General Corporation Law of Nevada.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Amendment this 19th day of June, 1998 and DO HEREBY CERTIFY under the penalties
of perjury, that
<PAGE>
facts stated in this Certificate of Amendment are true and correct and are of
our own knowledge.
/s/ Adrian A. Joseph
-----------------------------------
Adrian A. Joseph, President
/s/ Sharon Nitka
-----------------------------------
Sharon Nitka, Secretary
STATE OF CALIFORNIA )
) SS.:
COUNTY OF LOS ANGELES )
On this 19th day of June, 1998, personally appeared before me, a Notary
Public in and for the State and County aforesaid, ADRIAN A. JOSEPH, known to
me and to be the person described in and who executed the foregoing
Certificate of Amendment To Articles of Incorporation of Nurescell Inc., and
who acknowledged to me that he executed this same freely and voluntarily and
for the uses and purposes therein mentioned.
WITNESS my hand and official seal, the day and year first above written.
PATRICIA C. RANGEL
[SEAL] COMMISSION # 1096089 /s/ Patricia C. Rangel
NOTARY PUBLIC-CALIFORNIA ------------------------------
Los Angeles County Notary Public
MY COMM. EXPIRES APR 28, 2000
(Notarial Seal)
STATE OF CALIFORNIA )
)SS.:
COUNTY OF LOS ANGELES )
On this 19th day of June, 1998, personally appeared before me, a Notary
Public in and for the State and County aforesaid, SHARON NITKA, known to me and
to be the person described in and who executed the foregoing Certificate of
Amendment To Articles of Incorporation of Nurescell Inc., and who acknowledged
to me that he executed this same freely and voluntarily and for the uses and
purposes therein mentioned.
WITNESS my hand and official seal, the day and year first above written.
PATRICIA C. RANGEL
[SEAL] COMMISSION # 1096089 /s/ Patricia C. Rangel
NOTARY PUBLIC-CALIFORNIA ------------------------------
Los Angeles County Notary Public
MY COMM. EXPIRES APR 28, 2000
(Notarial Seal)
<PAGE>
BYLAWS
OF
NURESCELL INC.
A NEVADA CORPORATION
ARTICLE I
STOCKHOLDERS
SECTION 1.1 ANNUAL MEETINGS. An annual meeting of stockholders shall be
held for the election of directors on such date and at such time as may be
determined from time to time by the board of directors. Any other proper
business may be transacted at the annual meeting.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of stockholders may be
called by the board of directors, or the president. Special meetings may not be
called by any other person or persons. Each special meeting shall be held on
such date and at such time as is determined by the person or persons calling the
meeting.
SECTION 1.3 LOCATION OF MEETINGS. Each annual meeting or special meeting
of stockholders shall be held at such place, within or without the State of
Nevada, as may be determined by the board of directors, or if no determination
is made, at such place as may be determined by the president, or by any other
officer authorized by the board of directors or the president to make such
determination.
SECTION 1.4 NOTICE. Notice of each annual or special meeting shall be in
writing and signed by the president or a vice-president, or the secretary, or an
assistant secretary, or by such other natural person or persons designated by
the board of directors. The notice must state the purpose or purposes for which
the meeting is called and the date and time when, and the place where it is to
be held. The notice shall contain such additional information as may be required
by applicable law or determined by the board of directors. Subject to the
requirements of applicable law, notice shall be given to such persons at such
time, and in such manner, as the board of directors shall determine or if no
determination is made, as the president, or any other officer so authorized by
the board of directors of the president, shall determine.
SECTION 1.5 WAIVER OF NOTICE. Any stockholder may waive notice of any
meeting by a writing signed by such stockholder, or the stockholder's duly
authorized attorney, either before or after the meeting.
1
EXHIBIT 2.2
<PAGE>
SECTION 1.6 CONDUCT OF MEETINGS. Subject to the requirements of
applicable law, each annual or special meeting of stockholders shall be
conducted in accordance with such rules and procedures as the board of directors
may determine and as to matters not governed such rules and procedures, as the
chairperson of the meeting shall determine. The chairperson of any annual or
special meeting of stockholders shall be designated by the board of directors
and, in the absence of any such designation, shall be the president.
Stockholders may participate in any annual or special meeting of stockholders by
means of a telephone conference call or similar method of communication by which
all persons participating in the meeting can hear each other. Any such
participation constitutes presence in person at the meeting.
SECTION 1.7 QUORUM. The presence in person or by proxy of persons
holding at least a majority of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business.
SECTION 1.8 RECORD DATE. In order that the corporation may determine
the stockholders entitled to notice of or to vote at, any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the board of directors may fix
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors and
which record date: (1) in the case of determination of stockholders entitled
to vote at any meeting of stockholders or adjournment thereof, shall, unless
otherwise required by law, not b more than 60 nor less than 10 days before
the date of such meeting; (2) in the case of determination of stockholders
entitled to express consent to corporate action in writing without a meeting,
shall not be more than 10 days from the date upon which the resolution fixing
the record date is adopted by the board of directors; and (3) in the case of
any other action, shall not be more than 60 days prior to such other action.
If no record date is fixed: (1) the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held; (2) the record date for determining
stockholders entitled to express consent to corporate action in writing
without a meeting when no prior action of the board of directors is required
by law, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the
board of directors is required by law, shall be at the close of business on
the day on which the board of directors adopts the resolution taking such
prior action; and (3) the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the board
of directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the
adjourned meeting.
2
<PAGE>
ARTICLE II
DIRECTORS
SECTION 2.1 QUALIFICATIONS AND NUMBER. Each director must be at least 18
years of age. A director need not be a stockholder of this corporation or a
resident of the State of Nevada. The authorized number of directors as provided
in the Articles of Incorporation shall not be less than one (1) nor more than
five (5). The exact number of authorized directors shall be one (1) until
changed, within the limits specified, by a bylaw amending this provision, duly
adopted by the board of directors or by a majority of the outstanding shares
entitled to vote.
SECTION 2.2 MEETINGS.
(a) TIME AND LOCATION. Each meeting of the board of
directors shall be held on such date and at such time and place within or
without the State of Nevada as shall be fixed by the board of directors or
the person calling the meeting.
(b) CALL. No call shall be required for regular meetings
for which the time and place have been fixed by the board of directors. Special
meetings may be called by or at the direction of the President or of a majority
of the directors in office.
(c) NOTICE. Notice need not be given for regular meetings
for which the time and place have been fixed by the board of directors. Notice
of the time, date and location of a special meeting shall be given by the person
or persons calling the meeting at least 24 hours before the special meeting.
(d) QUORUM AND ACTION. A majority of the board of directors
shall constitute a quorum for the transaction of business. Except as otherwise
provided by applicable law, or the articles of incorporation, the act of the
directors holding a majority of the voting power of the directors, present at a
meeting at which a quorum is present, is the act of the board of directors.
(e) TELEPHONIC MEETINGS. Unless otherwise restricted by the
articles of incorporation, members of the board of directors, or any committee
designated by the board of directors, may participate in a meeting of the board
of directors or committed by means of a telephone conference or similar method
of communication by which all persons participating can hear each other.
Participation in a meeting in accordance with this subsection constitutes
presence in person at the meeting.
SECTION 2.3 ACTION WITHOUT A MEETING. Unless otherwise restricted by
the articles of incorporation, any action required or permitted to be taken
at a meeting of the board of directors,, or of any committee designated by
the board of directors, may be taken without a meeting if, before or after
the action, a written consent thereto is signed by all the members of the
board of directors
3
<PAGE>
or of the committee, as the case may be. The written consent must be filed with
the minutes of proceedings of the board of directors or committee, as the case
may be.
ARTICLE III
OFFICERS
SECTION 3.1 REQUIRED OFFICERS. The corporation must have a President,
Secretary, and a Treasurer. The board of directors may, if it so desires, choose
from its members, a Chairman of the Board and a Vice-Chairman of the Board. The
corporation may also have one or more Vice-Presidents, Assistant Secretaries,
and Assistant Treasurers, and such other officers and agents as may be deemed
necessary by the board of directors. Officers shall be chosen by the board of
directors or chosen in the manner determined by the board of directors.
SECTION 3.2 QUALIFICATIONS. All officers must be natural persons and
any natural person may hold two or more offices.
SECTION 3.3 TERM OF OFFICE AND VACANCIES. Unless otherwise provided in
the resolution choosing the officer, each officer shall hold office until his or
her successor shall have been chosen and qualified or until his or her earlier
resignation or removal. Any vacancy in any office may be filled by the board of
directors or in the manner determined by the Board.
SECTION 3.4 RESIGNATION. Any officer may resign at any time by giving
written notice to the corporation. The resignation shall take effect as of the
date received or at any later time specified in the notice. The resignation need
not be accepted to be effective. Any such resignation shall be without prejudice
to the contractual rights of the corporation, if any.
SECTION 3.5 REMOVAL. Without prejudice to the contractual rights, if
any, of any officer, any officer may be removed with or without cause by the
board of directors or in the manner determined by the board of directors.
SECTION 3.6 POWERS AND DUTIES. The officers of the corporation shall
have such powers and duties in the management and operation of the corporation
as may be prescribed by the board of directors and, to the extent not so
provided, as generally pertain to their office, subject to the board of
directors.
ARTICLE IV
AMENDMENTS
The power to amend, alter, and repeal these Bylaws and to make new Bylaws
shall be vested in the board of directors subject to the Bylaws, if any, adopted
by the stockholders.
4
<PAGE>
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy of
the Bylaws of Nurescell Inc., a Nevada corporation, as in effect on the date
hereof.
IN WITNESS WHEREOF, I have hereunto subscribed by name as of May 18, 1998.
/s/
------------------------------------
(SEAL)
5
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE UNDERLYING COMMON STOCK
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS; THEY HAVE BEEN ACQUIRED BY THE HOLDER FOR INVESTMENT AND MAY
NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
CLASS "A" COMMON STOCK PURCHASE WARRANT CERTIFICATE
FOR THE PURCHASE OF UNITS
OF
NURESCELL INC.
EACH UNIT CONSISTING OF
1 SHARE OF COMMON STOCK AND
1 CLASS "B" COMMON STOCK PURCHASE WARRANT OF NURESCELL INC.
NO.___________ ___ WARRANTS
CERTIFICATE EVIDENCING _______ WARRANTS (ONE WARRANT IS REQUIRED FOR
THE PURCHASE OF ONE SHARE OF COMMON STOCK AND ONE CLASS "B" COMMON STOCK
PURCHASE WARRANT OF NURESCELL INC., SUBJECT TO ADJUSTMENT AS PROVIDED BELOW)
FOR VALUE RECEIVED NURESCELL INC. (the "Corporation"), a Nevada
corporation, hereby certifies that ___________________________________________
_________ or its registered assigns is entitled to purchase from the
Corporation, at any time in whole or from time to time in part on or after
___________ ______ 199_____ and prior to 5:00 p.m. ___________ ____, 199_____,
such number Units each comprised of one fully paid and non-assessable shares of
the Common Stock of the Corporation and one Class "B" Common Stock Purchase
Warrant of the Company as shall equal the number of Warrants evidenced by this
Certificate at a price of $4.00 per Unit (such price per share and the shares so
purchasable are subject to adjustment as provided below). (Each Class "B" Common
Stock Purchase Warrant of the Company is separately exercisable in accordance
with its terms into one share of the Common Stock of the Corporation)
Hereinafter, (i) said Common Stock, together with any other equity
securities which may be issued by the Corporation in addition thereto or in
substitution therefor, is referred to as the "Common Stock," (ii) the shares
of the Common Stock purchased or purchasable hereunder are referred to as the
"Warrant Shares," (iii) the Class "B" Common Stock Purchase Warrants
purchased or purchasable hereunder are referred to as the "Class B Warrants",
(iv) the aggregate purchase price payable hereunder for the Units is referred
to as the "Aggregate Unit Warrant Price," and (iv) the price payable
hereunder for each of the Units is referred to as the "Per Unit Warrant
Price."
CLASS A WARRANT - 1
EXHIBIT 3.1
<PAGE>
1. EXERCISE OF WARRANTS. The holder of this Certificate (the
"Holder") may exercise all or such part (as specified below) of the Warrants
evidenced by this Certificate on and after ______________ _____ 19______ and
prior to 5:00 p.m. on __________ ____ 19_____ by the surrender of this
Certificate (with the subscription form at the end hereof duly executed) at the
principal executive office of the Corporation, together with proper payment of
the Aggregate Unit Warrant Price, or the proportionate part thereof if this
Certificate is exercised in part. Payment for Units shall be made by check,
payable to the order of the Corporation. If this Certificate is exercised in
part, this Certificate must be exercised for a number of whole Units and the
Holder shall be entitled to receive a new Certificate covering the number of
Units in respect of which this Certificate has not been exercised and setting
forth the proportionate part of the Aggregate Unit Warrant Price applicable to
such Units. Upon such surrender of this Certificate, the Corporation will (a)
issue a certificate or certificates in the name of the Holder for the largest
number of whole Warrant Shares and Class B Warrants to which the Holder shall be
entitled pursuant to said exercise and, if this Certificate is exercised in
whole, in lieu of any fractional share of the Common Stock and Class B Warrants
to which the Holder shall be entitled, cash equal to the fair value of such
fractional share (determined in such reasonable manner as the Board of Directors
of the Corporation shall determine), and (b) deliver the other securities and
properties receivable upon the exercise of this Certificate, or the
proportionate part thereof if this Certificate is exercised in part, pursuant to
the provisions of this Certificate.
2. RESERVATION OF WARRANT SHARES. The Corporation agrees that, prior
to the expiration of this Certificate, the Corporation will at all times have
authorized and reserved solely for issuance or delivery upon the exercise of
this Certificate, the shares of the Common Stock and other securities and
properties as from time to time shall be receivable upon the exercise of this
Certificate.
3. ANTIDILUTION.
(a) DISTRIBUTIONS WITH RESPECT TO COMMON STOCK. If, at any time
or from time to time after the date of this Warrant, the Corporation shall
distribute to the holders of the Common Stock, without payment therefor (each
hereinafter a "Distribution"), (i) securities, other than shares of the Common
Stock, or (ii) property, other than cash, with respect to the Common Stock,
then, and in each such case, subject to Section 3(d) below, the Holder, upon the
exercise of this Warrant, shall be entitled to receive for the purchase price of
the Units purchased, in addition to the Warrant Shares and the Class B Warrants,
the amount of such assets (or at the option of the Corporation a sum equal to
the value thereof at the time of such Distribution to holders of Common Stock as
such value is determined by the Board of Directors of the Corporation in good
faith), which would have been payable to such Holder had it been the holder of
record of such Warrant Shares on the record date for the determination of those
entitled to such Distribution.
(b) ADJUSTMENT OF NUMBER OF SHARES. In case the Corporation
shall at any time issue Common Stock by way of a dividend or other distribution
on any stock of the Corporation or subdivide or combine the outstanding shares
of Common Stock, the Per Unit Warrant Price shall be proportionately decreased
in the case of (i) such issuance (on the day following the date fixed for
determining shareholders entitled to receive such dividend or other
distribution), or (ii) such subdivision; or the Per Unit Warrant Price shall be
increased in the case of such combination (on the date that such subdivision or
combinations shall become effective).
(c) NUMBER OF SHARES ADJUSTED. Upon any adjustment of the Per
Unit Warrant Price, the Holder shall thereafter (until another such adjustment)
be entitled to purchase, at the new Per Unit Warrant Price, the number of
shares, calculated to the nearest full share, obtained by multiplying the number
of shares of Units initially issuable upon exercise of all Warrants evidenced by
this Certificate by the Per Unit Warrant Price in effect on the date thereof and
dividing the product so obtained by the new Per Unit Warrant Price.
(d) REORGANIZATION. In the event that the Corporation at any
time proposes to (i) merge into, consolidate with or enter into any other
reorganization in which the Corporation is not the surviving corporation, (ii)
enter into a merger or other reorganization as a result of which the outstanding
shares of Common Stock of the Corporation will be changed into or exchanged for
shares of the capital stock or other securities of another corporation or for
cash or other property, or (iii) liquidate or dissolve (each hereinafter
referred to as a "Triggering Event"), the Corporation shall mail notice thereof
to the Holder setting forth the
CLASS A WARRANT - 2
<PAGE>
principal terms of such Triggering Event and the amount and nature of any cash,
securities or other property anticipated to be distributable to the holders of
the (Corporation's Common Stock in connection therewith (the "Notice"), and
shall not consummate such Triggering Event nor make any distribution to
shareholders with respect thereto, until the expiration of thirty (30) days
after the date of mailing of the Notice, and then only to shareholders of record
as of a date at least thirty (30) days after the date of mailing of the Notice,
in order to afford the Holder the opportunity to exercise this Warrant prior to
the consummation of the Triggering Event. Accordingly, any Notice of exercise of
this Warrant given during the thirty (30) day period following the mailing of a
Notice may, at the election of the Holder, be made contingent upon, and to be
effective concurrently with, the consummation of the Triggering Event to which
the Notice relates. Notwithstanding any other provision hereof, upon the
expiration of thirty (30) days after the mailing of the Notice, this Warrant, to
the extent notice of intent to exercise thereof has not been given to the
Corporation, shall automatically expire and terminate, provided that the
Triggering Event to which such Notice relates is thereafter consummated.
(e) APPLICABILITY TO CLASS B WARRANT. The foregoing
antidilution terms of this Section 3 shall similarly apply to the Class B
Warrants and the underlying Common Stock which is the sole security into which
such Class B Warrants are exercisable.
4. OFFICER'S CERTIFICATE. Whenever the Per Unit Warrant Price shall
be adjusted as required by the provisions of Section 3 hereof, the Corporation
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office, an officer's certificate showing the adjusted Per Unit
Warrant Price determined as herein provided and setting forth in reasonable
detail the facts requiring such adjustment. Each such officer's certificate
shall be made available at all reasonable times for inspection by the Holder,
and the Corporation shall, forthwith after each such adjustment, deliver a copy
of such certificate to the Holder.
5. FULLY PAID STOCK: TAXES. The Corporation agrees that the shares of
the Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Certificate shall, at the time of such
delivery, be validly issued and outstanding; fully paid and non-assessable, and
the Corporation will take all such actions as may be necessary to assure that
the par value or stated value, if any, per share of the Common Stock is at all
times equal to or less than the then Per Unit Warrant Price. The Corporation
further covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes which may be payable in
respect of the issue of any Warrant Share or certificate therefor.
6. REPRESENTATIONS AND COVENANTS OF HOLDER.
(i) The Holder acknowledges that upon exercise of any of the
Warrants represented by this Certificate, the Warrant Shares and the Class "B"
Warrants may not, at the time of their issuance, have been registered under the
Securities Act of 1933 (the "Act") or registered or qualified under state
securities law, as the offer and sale of the Warrants may be made pursuant to
exemptions from the registration and qualification requirements of such Act and
such law, and, in this connection, the Corporation is relying in part on the
representations of the Holder set forth herein.
(ii) The Holder covenants that no disposition of all or any part
of the Warrant Shares and Class "B" Warrants issuable upon the exercise of this
Certificate shall be made unless and until the Corporation shall have been
furnished with an opinion of counsel in form and substance satisfactory to the
Corporation to the effect that such disposition is being made in compliance with
the registration requirements of the Act, if applicable, or an applicable
exemption therefrom.
(iii) The Holder covenants that if the Warrant Shares and Class B
Warrants are not registered under the Act and applicable state securities laws,
the Warrant Shares and the Class B Warrants will be acquired by the Holder for
its account for investment and not with a view to the sale or distribution of
any part thereof, and the Holder will have no present intent to sell or
otherwise distribute the Warrant Shares.
(iv) The Holder further understands and agrees that if the
Warrant Shares and the Class "B" Warrants are not registered under the Act and
applicable state securities laws at the time of issuance,
CLASS A WARRANT - 3
<PAGE>
the certificates evidencing the Warrant Shares will bear and be subject to a
legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS; THEY HAVE BEEN ACQUIRED
BY THE HOLDER FOR INVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF
1933 AND APPLICABLE STATE SECURITIES LAWS, AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER.
(v) Upon any exercise of this Certificate, if deemed reasonably
necessary by the Corporation's counsel, the exercising party shall execute and
deliver to the Corporation an investment representation letter in connection
with such exercise with provisions comparable to those set forth in this Section
6.
(vi) Any subsequent holder of this Warrant, by such holder's acceptance
hereof, agrees to be bound by all of the terms and provisions of this Warrant,
including but not limited to this Section 6.
7. WARRANT REGISTER. This Warrant is transferable only upon the books
of the Corporation which it shall cause to be maintained for such purpose. The
Corporation may treat the registered holder of this Warrant as such holder
appears on the Corporation's books at any time as the Holder for all purposes.
8. NOTICES. All notices to the Holder provided for herein shall be
deemed given upon mailing of the same via first class mail addressed to the
Holder at the Holder's address as it appears on the books and records of the
Corporation.
9. LOSS, ETC., OF WARRANT. Upon receipt of evidence satisfactory to
the Corporation of the loss, theft, destruction or mutilation of this
Certificate, and of indemnity reasonably satisfactory to the Corporation, if
lost, stolen or destroyed, and upon surrender and cancellation of this
Certificate, if mutilated, and upon reimbursement of the Corporation's
reasonable incidental expenses, the Corporation shall execute and deliver to the
Holder a new Certificate of like date, tenor and denomination.
10. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided
herein, this Certificate does not confer upon the Holder any right to vote or to
consent or to receive notice as a shareholder of the Corporation, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to any exercise hereof, in whole or in part.
11. COMMUNICATION. No notice or other communication under this
Certificate shall be effective unless, but any notice or other communication
shall be effective and shall be deemed to have been given if, the same is in
writing and is mailed by first class mail, postage prepaid, addressed to:
(a) the Corporation at 2030 Main Street, 13th Floor, Irvine,
California 92614, or such other address as the Corporation has designated in
writing to the Holder, or
(b) the Holder at __________________________________________,
or such other address as the Holder has designated in writing to the
Corporation.
12. HEADINGS. The headings of this Certificate have been inserted as a
matter of convenience and shall not affect the construction hereof.
13. APPLICABLE LAW. This Certificate shall be governed by and
constructed in accordance with the laws of the State of Nevada.
CLASS A WARRANT - 4
<PAGE>
IN WITNESS WHEREOF, has caused this Certificate to be signed by its
President and its corporate seal to be hereunto affixed and attested by its
Secretary as of this ______________________________ day of ___________________,
19 _____.
NURESCELL INC.
By:
---------------------------------
Adrian A. Joseph, President
ATTEST:
- --------------------
Secretary
(Corporate Seal)
CLASS A WARRANT - 5
<PAGE>
SUBSCRIPTION
The undersigned, ____________________________, pursuant to the provisions
of the Class "A" Common Stock Purchase Warrant Certificate, dated
_____________, 19____, (the "Certificate") granted by Nurescell Inc. for
________ shares of its Common Stock and ______________________ Class "B" Common
Stock Purchase Warrants, hereby elects to purchase _____________________
(________) shares of the Common Stock and __________________ (________) Class
"B" Common Stock Purchase Warrants of Nurescell Inc. covered by the
Certificate.
Dated:______________, 19_______
Signature:______________________________
CLASS A WARRANT - 6
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE UNDERLYING COMMON STOCK
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS; THEY HAVE BEEN ACQUIRED BY THE HOLDER FOR INVESTMENT AND MAY
NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
CLASS "B" COMMON STOCK PURCHASE WARRANT CERTIFICATE
FOR THE PURCHASE OF SHARES OF COMMON STOCK
OF
NURESCELL INC.
No.______ ________ Warrants
CERTIFICATE EVIDENCING _________________WARRANTS (ONE WARRANT IS REQUIRED
FOR THE PURCHASE OF ONE SHARE OF COMMON STOCK OF NURESCELL INC., SUBJECT TO
ADJUSTMENT AS PROVIDED BELOW).
FOR VALUE RECEIVED, NURESCELL INC. (the "Corporation"), a Nevada
corporation, hereby certifies that ___________________________________________
or its registered assigns is entitled to purchase from the Corporation, at any
time in whole or from time to time in part on or after ______________ ____,
199_____ and prior to 5:00 p.m. __________ _____, 199___, such number of fully
paid and non-assessable shares of the Common Stock of the Corporation as shall
equal the number of Warrants evidenced by this Certificate at a price of $3.00
per share (such price per share and the shares so purchasable are subject to
adjustment as provided below). Hereinafter, (i) said Common Stock, together with
any other equity securities which may be issued by the Corporation in addition
thereto or in substitution therefor, is referred to as the "Common Stock," (ii)
the shares of the Common Stock purchased or purchasable hereunder are referred
to as the "Warrant Shares," (iii) the aggregate purchase price payable hereunder
for the Warrant Shares is referred to as the "Aggregate Warrant Price," and (iv)
the price payable hereunder for each of the Warrant Shares is referred to as the
"Per Share Warrant Price."
1. EXERCISE OF WARRANTS. The holder of this Certificate (the
"Holder") may exercise all or such part (as specified below) of the Warrants
evidenced by this Certificate on and after _____________ _____, 19____ and prior
to 5:00 p.m. on ___________ ____, 19____ by the surrender of this Certificate
(with the subscription form at the end hereof duly executed) at the principal
executive office of the Corporation, together with proper payment of the
Aggregate Warrant Price, or the proportionate part thereof if this Certificate
is exercised in part. Payment for Warrant Shares shall be made by check, payable
to the order of the Corporation. If this Certificate is exercised in part, this
Certificate must be exercised for a number of whole shares of the Common Stock
and the Holder shall be entitled to receive a new Certificate covering the
number of Warrant Shares in respect of which this Certificate has not been
exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such surrender of this
Certificate, the Corporation will (a) issue a certificate or certificates in the
name of the Holder for the largest number of whole shares of the Common Stock to
which the Holder shall be entitled pursuant to said exercise and, if this
Certificate is exercised in whole, in lieu of any fractional share of the Common
Stock to which the Holder shall be entitled, cash equal to the fair value of
such fractional share (determined in such reasonable
B WARRANT-1
EXHIBIT 3.2
<PAGE>
manner as the Board of Directors of the Corporation shall determine), and (b)
deliver the other securities and properties receivable upon the exercise of this
Certificate, or the proportionate part thereof if this Certificate is exercised
in part, pursuant to the provisions of this Certificate.
2. RESERVATION OF WARRANT SHARES. The Corporation agrees that, prior
to the expiration of this Certificate, the Corporation will at all times have
authorized and reserved solely for issuance or delivery upon the exercise of
this Certificate, the shares of the Common Stock and other securities and
properties as from time to time shall be receivable upon the exercise of this
Certificate, free and clear of all restrictions on original issuance and free
and clear of all preemptive rights.
3. ANTIDILUTION.
(a) DISTRIBUTIONS WITH RESPECT TO COMMON STOCK. If, at any time
or from time to time after the date of this Warrant, the Corporation shall
distribute to the holders of the Common Stock, without payment therefor (each
hereinafter a "Distribution"), (i) securities, other than shares of the Common
Stock, or (ii) property, other than cash, with respect to the Common Stock,
then, and in each such case, subject to Section 3(d) below, the Holder, upon the
exercise of this Warrant shall be entitled to receive for the purchase price of
the Warrant Shares purchased, in addition to the Warrant Shares, the amount of
such assets (or at the option of the Corporation a sum equal to the value
thereof at the time of such Distribution to holders of Common Stock as such
value is determined by the Board of Directors of the Corporation in good faith),
which would have been payable to such Holder had it been the holder of record of
such Warrant Shares on the record date for the determination of those entitled
to such Distribution.
(b) ADJUSTMENT OF NUMBER OF SHARES. In case the Corporation
shall at any time issue Common Stock by way of a dividend or other distribution
on any stock of the Corporation or subdivide or combine the outstanding shares
of Common Stock, the Per Share Warrant Price shall be proportionately decreased
in the case of (i) such issuance (on the day following the date fixed for
determining shareholders entitled to receive such dividend or other
distribution), or (ii) such subdivision; or the Per Share Warrant Price shall be
increased in the case of such combination (on the date that such subdivision or
combinations shall become effective).
(c) NUMBER OF SHARES ADJUSTED. Upon any adjustment of the Per
Share Warrant Price, the Holder shall thereafter (until another such adjustment)
be entitled to purchase, at the new Per Share Warrant Price, the number of
shares, calculated to the nearest full share, obtained by multiplying the number
of shares of Common Stock initially issuable upon exercise of all Warrants
evidenced by this Certificate by the Per Share Warrant Price in effect on the
date thereof and dividing the product so obtained by the new Per Share Warrant
Price.
(d) REORGANIZATION. In the event that the Corporation at any
time proposes to (i) merge into, consolidate with or enter into any other
reorganization in which the Corporation is not the surviving corporation, (ii)
enter into a merger or other reorganization as a result of which the outstanding
shares of Common Stock of the Corporation will be changed into or exchanged for
shares of the capital stock or other securities of another corporation or for
cash or other property, or (iii) liquidate or dissolve (each hereinafter
referred to as a "Triggering Event"), the Corporation shall mail notice thereof
to the Holder setting forth the principal terms of such Triggering Event and the
amount and nature of any cash, securities or other property anticipated to be
distributable to the holders of the Corporation's Common Stock in connection
therewith (the "Notice"), and shall not consummate such Triggering Event nor
make any distribution to shareholders with respect thereto, until the
expiration of thirty (30) days after the date of mailing of the Notice, and
then only to shareholders of record as of a date at least thirty (30) days
after the date of mailing of the Notice, in order to afford the Holder the
opportunity to exercise this Warrant prior to the consummation of the
Triggering Event. Accordingly, any Notice of exercise of this Warrant given
during the thirty (30) day period following the mailing of a Notice may, at
the election of the Holder, be made contingent upon, and to be effective
concurrently with, the consummation of the Triggering Event to which the
Notice relates. Notwithstanding any other provision hereof, upon the
expiration of thirty (30) days after the mailing of the Notice, this Warrant,
to the extent notice of intent to exercise thereof has not been given to the
Corporation, shall automatically expire and terminate, provided that the
Triggering Event to which such Notice relates is thereafter consummated.
B WARRANT - 2
<PAGE>
4. OFFICER'S CERTIFICATE. Whenever the Per Share Warrant Price shall
be adjusted as required by the provisions of Section 3 hereof, the Corporation
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office, an officer's certificate showing the adjusted Per Share
Warrant Price determined as herein provided and setting forth in reasonable
detail the facts requiring such adjustment. Each such officer's certificate
shall be made available at all reasonable times for inspection by the Holder,
and the Corporation shall, forthwith after each such adjustment, deliver a copy
of such certificate to the Holder.
5. FULLY PAID STOCK; TAXES. The Corporation agrees that the shares of
the Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Certificate shall, at the time of such
delivery, be validly issued and outstanding; fully paid and non-assessable, and
the Corporation will take all such actions as may be necessary to assure that
the par value or stated value, if any, per share of the Common Stock is at all
times equal to or less than the then Per Share Warrant Price. The Corporation
further covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes which may be payable in
respect of the issue of any Warrant Share or certificate therefor.
6. REPRESENTATIONS AND COVENANTS OF HOLDER.
(i) The Holder acknowledges that upon exercise of any of the
Warrants represented by this Certificate, the Warrant Shares may not, at the
time of their issuance, have been registered under the Securities Act of 1933
(the "Act") or registered or qualified under state securities law, as the
offer and sale of the Warrants may be made pursuant to exemptions from the
registration and qualification requirements of such Act and such law, and, in
this connection, the Corporation is relying in part on the representations of
the Holder set forth herein.
(ii) The Holder covenants that no disposition of all or any
part of the Warrant Shares issuable upon the exercise of this Certificate
shall be made unless and until the Corporation shall have been furnished with
an opinion of counsel in form and substance satisfactory to the Corporation
to the effect that such disposition is being made in compliance with the
registration requirements of the Act, if applicable, or an applicable
exemption therefrom.
(iii) The Holder covenants that if the Warrant Shares are not
registered under the Act and applicable state securities laws, the Warrant
Shares will be acquired by the Holder for its account for investment and not
with a view to the sale or distribution of any part thereof, and the Holder will
have no present intent to sell or otherwise distribute the Warrant Shares.
(iv) The Holder further understands and agrees that if the
Warrant Shares are not registered under the Act and applicable state securities
laws at the time of issuance, the certificates evidencing the Warrant Shares
will bear and be subject to a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS; THEY HAVE BEEN ACQUIRED BY THE HOLDER FOR
INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
(v) Upon any exercise of this Certificate, if deemed reasonably
necessary by the Corporation's counsel, the exercising party shall execute and
deliver to the Corporation an investment representation letter in connection
with such exercise with provisions comparable to those set forth in this Section
6.
(vi) Any subsequent holder of this Warrant, by such holder's
acceptance hereof, agrees to be bound by all of the terms and provisions of this
Warrant, including but not limited to this Section 6.
B WARRANT - 3
<PAGE>
7. WARRANT REGISTER. This Warrant is transferable only upon the books
of the Corporation which it shall cause to be maintained for such purpose. the
Corporation may treat the registered holder of this Warrant as he or it appears
on the Corporation's books at any time as the Holder for all purposes.
8. NOTICES. All notices to the Holder provided for herein shall be
deemed given upon mailing of the same via first class mail addressed to the
Holder at the Holder's address as it appears on the books and records of the
Corporation.
9. LOSS, ETC., OF WARRANT. Upon receipt of evidence satisfactory to
the Corporation of the loss, theft, destruction or mutilation of this
Certificate, and of indemnity reasonably satisfactory to the Corporation, if
lost, stolen or destroyed, and upon surrender and cancellation of this
Certificate, if mutilated, and upon reimbursement of the Corporation's
reasonable incidental expenses, the Corporation shall execute and deliver to the
Holder a new Certificate of like date, tenor and denomination.
10. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided
herein, this Certificate does not confer upon the Holder any right to vote or to
consent or to receive notice as a shareholder of the Corporation, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to any exercise hereof, in whole or in part.
11. COMMUNICATION. No notice or other communication under this
Certificate shall be effective unless, but any notice or other communication
shall be effective and shall be deemed to have been given if, the same is in
writing and is mailed by first class mail, postage prepaid, addressed to:
(a) the Corporation at 2030 Main St., Ste. 1300, Irvine,
California 92614, or such other address as the Corporation has designated in
writing to the Holder, or
(b) the Holder at ____________________________________________
or such other address as the Holder has designated in writing to the
Corporation.
12. HEADINGS. The headings of this Certificate have been inserted as a
matter of convenience and shall not affect the construction hereof.
13. APPLICABLE LAW. This Certificate shall be governed by and
constructed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, NURESCELL INC. has caused this Certificate to be
signed by its President and its corporate seal to be hereunto affixed and
attested by its Secretary as of this _____________________ day of _____________,
19_____.
NURESCELL INC.
By:
-------------------------------
President
ATTEST:
- -------------------------------
SECRETARY
(Corporate Seal)
B WARRANT - 4
<PAGE>
SUBSCRIPTION
The undersigned, _______________________________, pursuant to the
provisions of the Class "B" Common Stock Purchase Warrant Certificate, dated
_______, 19___, (the "Certificate") granted by Nurescell Inc. for ________
shares of its Common Stock, hereby elects to purchase ____________________
____________ (________) shares of the Common Stock of Nurescell Inc.
covered by the Certificate.
Dated: , 19
------------ ----
Signature:
---------------------------
NAME:
---------------------------
(Please Print)
Address:
---------------------------
---------------------------
---------------------------
B WARRANT - 5
<PAGE>
EMPLOYMENT AGREEMENT
FOR PRESIDENT AND CHIEF EXECUTIVE OFFICER
NURESCELL, INC., a Nevada corporation, with its principal place of
business located at 2030 Main Street, Irvine, California 92677, hereinafter
referred to as Employer, and ADRIAN JOSEPH, 27451 Maverick Circle, Laguna
Hills, California 92653, hereinafter referred to as Employee, in
consideration of the mutual promises made herein, agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT
SPECIFIED PERIOD
Section 1.01. Employer hereby employs Employee and Employee hereby
accepts employment with Employer for a period of three years beginning June
1, 1998 and terminating on June 1, 2001.
AUTOMATIC RENEWAL
Section 1.02. This agreement shall be renewed automatically for
succeeding terms of one (1) year unless either party gives notice to the
other at least sixty (60) days prior to the expiration of any term of his
intention not to renew.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
GENERAL DUTIES
Section 2.01. Employee shall serve as the President of Nurescell, Inc.
In his capacity as President of Nurescell, Inc., Employee shall do and
perform all services, acts, or things necessary or advisable to manage and
conduct the business of Employer, including the hiring and firing of all
employees, subject at all times to the policies set by Employer's Board of
Directors, and to the consent of the Board when required by the terms of this
contract.
MATTERS REQUIRING CONSENT OF BOARD OF DIRECTORS
Section 2.02. Employee shall not, without specific approval of
Employer's Board of Directors, do or contract to do any of the following:
(1) Borrow on behalf of Employer during any one fiscal year an amount
in excess of Two Hundred Fifty Thousand Dollars ($250,000.00).
(2) Purchase capital equipment for amounts in excess of the amounts
budgeted for expenditure by the Board of Directors.
1
EXHIBIT 6.1
<PAGE>
(3) Sell any single capital asset of Employer having market value in
excess of Two Hundred Fifty Thousand Dollars ($250,000.00) or a total of
capital assets during a fiscal year having a market value in excess of Two
Hundred Fifty Thousand Dollars ($250,000.00).
(4) Commit employer to the expenditure of more than $250,000.00 in the
development and sale of new products or services.
DEVOTION TO EMPLOYER'S BUSINESS
Section 2.03. (a). Employee shall devote his productive time, ability
and attention to the extent necessary and appropriate to carry out the duties
as President of the Corporation during the term of this contract.
(b) Nothing contained herein shall prevent Employee from pursuing
directly or indirectly other opportunities for performing other services for
other companies, whether for compensation or otherwise, provided, however,
that Employee shall notify the Board of Directors of such activities. If the
Board should object said additional activities, then in that event, the Board
shall be entitled to place reasonable restrictions upon said additional
activities. The expenditure of reasonable amounts of time for permissible
outside activities, E.G., educational, charitable, or professional activities
shall not be deemed a breach of this agreement if those activities do not
materially interfere with the services required under this agreement and
shall not require the prior written consent of Employer's Board of Directors.
(c) This agreement shall not be interpreted to prohibit Employee from
making passive personal investments or conducting private business affairs if
those activities do not materially interfere with the services required under
this agreement. However, Employee shall not directly or indirectly acquire,
hold, or retain any interest in any business competing with or similar in
nature to the business of Employer without the prior approval of the Board of
Directors..
COMPETITIVE ACTIVITIES
Section 2.04. During the term of this contract Employee shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the business of Employer.
UNIQUENESS OF EMPLOYEE'S SERVICES
Section 2.05. Employee hereby represents and agrees that the services
to be performed under the terms of this contract are of a special, unique,
unusual, extraordinary, and intellectual character that gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law. Employee therefore expressly agrees that
Employer, in addition to any other rights or remedies that Employer may
possess, shall be
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entitled to injunctive and other equitable relief to prevent or remedy a
breach of this contract by Employee.
TRADE SECRETS
Section 2.06. (a). The parties acknowledge and agree that during the
terms of this agreement and in the course of the discharge of his duties
hereunder, Employee shall have access to and become acquainted with
information concerning the operation and processes of Employer, including
without limitation, financial, personnel, sales, scientific, and other
information that is owned by Employer and regularly used in the operation of
Employer's business, and that such information constitutes Employer's trade
secrets.
(b) Employee specifically agrees that he shall not misuse,
misappropriate, or disclose any such trade secrets, directly or indirectly,
to any other person or use them in any way, either during the term of this
agreement or at any other time thereafter, except as is required in the
course of his employment hereunder.
(c) Employee acknowledges and agrees that the sale or unauthorized use
or disclosure of any of Employer's trade secrets obtained by Employee during
the course of his employment under this agreement, including information
concerning Employer's current or any future and proposed work, services, or
products, the facts that any such work, services, or products are planned,
under consideration, or in production, as well as any descriptions thereof,
constitute unfair competition. Employee promises and agrees not to engage in
any unfair competition with Employer, either during the term of this
agreement.
(d) Employee further agrees that all files, records, documents,
drawings, specifications, equipment, and similar items relating to Employer's
business, whether prepared by Employee or others, are and shall remain
exclusively the property of Employer and that they shall be removed from the
premises of Employer only with the express prior written consent of
Employer's Board of Directors.
USE OF EMPLOYEE'S NAME
Section 2.07. (a). Employer shall have the right to use the name of
Employee as part of the trade name or trademark of Employer if it should be
deemed advisable to do so. Any trade name or trademark, of which the name of
Employee is a part, that is adopted by Employer during the employment of
Employee may be used so long as Employee remains President of said Employer.
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ARTICLE 3. OBLIGATIONS OF EMPLOYER
GENERAL DESCRIPTION
Section 3.01. Employer shall provide Employee with the compensation,
incentives, benefits, and business expense reimbursement as specified in this
agreement.
OFFICE AND STAFF
Section 3.02. Employer shall provide Employee with a private office,
stenographic help, office equipment, supplies, and other facilities and
services, suitable to Employee's position and adequate for the performance of
his duties.
INDEMNIFICATION OF LOSSES OF EMPLOYEE
Section 3.03. Employer shall indemnify Employee for all losses
sustained by Employee in direct consequence of the discharge of his duties on
Employer's behalf.
ARTICLE 4. COMPENSATION OF EMPLOYEE
ANNUAL SALARY
Section 4.01. (a). As compensation for the services to be performed
hereunder, Employee shall receive a salary at the rate of One Eighty Thousand
Dollars ($180,000.00) per year, payable Fifteen Thousand Dollars ($15,000.00)
per month on or before the 26th day of each month or more frequently as the
Board of Directors may determine during the term of said employment.
(b) Employee shall receive such annual increases in salary as may be
determined by Employer's Board of Directors in its sole discretion at its
annual meeting.
SALARY CONTINUATION DURING DISABILITY
Section 4.02. If Employee for any reason whatsoever becomes permanently
disabled so that he is unable to perform the duties prescribed herein,
Employer agrees to pay Employee fifty (50%) percent of Employee's annual
salary, payable in the same manner as provided for the payment of salary
herein, for the balance of the contract.
TAX WITHHOLDING
Section 4.03. Employer shall have the right to deduct or withhold from
the compensation due to Employee hereunder any and all sums required for
federal income and
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Social Security taxes and all state or local taxes now applicable or that may
be enacted and become applicable in the future.
REPAYMENT OF DISALLOWED SALARY
Section 4.04. In the event that any portion of the compensation paid by
Employer to Employee is disallowed as an income tax deduction on an income
tax return of Employer, Employee agrees to immediately repay to Employer the
full amount of that portion.
ARTICLE 5. EMPLOYEE INCENTIVES
PROFIT-SHARING BASED ON PERFORMANCE
Section 5.01.(a). For each fiscal year of Employer in which the pre-tax
net profits of Employer exceed Three Hundred Thousand Dollars ($300,000.00)
over the previous year. Employer agrees to pay Employee, within two and
one-half months after the close of that fiscal year, an annual profit-sharing
payment equal to ten (10%) percent of that excess.
(b) If the employment term is terminated by Employer for cause,
Employee shall not be entitled to any portion of the annual profit-sharing
payment for the fiscal year in which that termination occurs. However, if
this contract should expire or be terminated for reasons other than cause,
Employee shall be entitled to that portion of the annual profit sharing
payment that the number of months during the fiscal year that he was employed
hereunder bears to 12 months.
(c) For the purpose of determining the amount of the annual profit
sharing bonus, the net profits of Employer shall be determined by the firm of
independent certified accountants then employed by Employer.
STOCK BONUS
Section 5.02. (a). Employer agrees to transfer to Employee each year
during the employment term, within two and one-half months after the close of
each fiscal year during all of which the Employee served as President of the
Employer, the number of shares of Employer's stock as may be determined by
the Board of Directors.
STOCK OPTION
Section 5.03.(a). Employer hereby grants Employee an option to purchase
One Hundred Thousand (100,000) shares per year of Employer's common stock at
a purchase price of One Dollar ($1.00) per share. This option may be
exercised in whole or in part, but may only be exercised in lots of Ten
Thousand (10,000) shares or more. Employee shall not have any of the
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rights of, nor be treated as, a shareholder with respect to the shares
subject to this option until he has exercised the option and has become the
shareholder of record of those shares.
(b) This option is not assignable.
(c) This option may only be exercised by Employee during the term of
his employment hereunder. However, in the event that the employment term is
terminated by Employer for reasons other than cause, Employee shall retain
the right to exercise any unused portion of the option until June 1, 2001.
ARTICLE 6. EMPLOYEE BENEFITS
ANNUAL VACATION
Section 6.01. Employee shall be entitled to three (3) weeks vacation
time each year with full pay. Employee may be absent from his employment for
vacation only at such times as Employer's Board of Directors shall determine
from time to time. If Employee is unable for any reason to take the total
amount of authorized vacation time during any year, he may accrue that time
and add it to vacation time for any following year or may receive a cash
payment in any amount equal to the amount of annual salary attributable to
that period.
ILLNESS
Section 6.02. Employee shall be entitled to fifteen days per year as
sick leave with full payment.
DEATH BENEFITS
Section 6.03. If Employee should die during the employment term and if
Employee has a surviving spouse at that time, Employer agrees to pay the
spouse the sum of one-half (1/2) of the salary stated herein per month for
the remainder of the Employment Agreement.
MEDICAL COVERAGE
Section 6.04. Employer agrees to include Employee in the coverage of
its medical, major medical, hospital, dental, and eye care insurance, if any.
Employer further agrees to reimburse Employee for all medical and dental
expenses incurred by Employee, his souse, and those of his children who
qualify as his dependents under Section 152 of the Internal Revenue Code of
1986; provided, however, that those reimbursements shall be limited to the
expenses, or portions thereof, not covered by insurance.
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LIFE INSURANCE
Section 6.05.(a). At Employee's option, Employer agrees to obtain a
life insurance policy on the life of Employee in the face amount of
$250,000.00. Employer further agrees to make that insurance policy payable to
the beneficiary or beneficiaries designated by Employee. Employer agrees to
pay all premiums on the policy during the term of employment provided herein.
(b) Employee agrees to submit to a physical examination at any time
requested by Employer for the purpose of Employer's obtaining life insurance
on the life of Employee for the benefit of Employer; provided, however, that
Employer shall bear the entire cost of that examination.
ARTICLE 7. BUSINESS EXPENSES
USE OF CREDIT CARD
Section 7.01. All business expenses reasonably incurred by Employee in
promoting the business of Employer, including expenditures for entertainment,
gifts, and travel, are to be paid for, insofar as possible, by the use of
credit cards in the name of Employer which will be furnished to Employee.
REIMBURSEMENT OF OTHER BUSINESS EXPENSES
Section 7.02. (a). Employer shall promptly reimburse Employee for all
other reasonable business expenses incurred by Employee in connection with
the business of Employer.
(b) Each such expenditure shall be reimbursable only if it is of a
nature qualifying it as a proper deduction on the federal and state income
tax return of Employer.
(c) Each such expenditure shall be reimbursable only if Employee
furnishes to Employer adequate records and other documentary evidence
required by federal and state statutes and regulations issued by the
appropriate taxing authorities for the substantiation of each such
expenditure as an income tax deduction.
REPAYMENT OF DISALLOWED EXPENSES
Section 7.03. In the event that any expenses paid for Employee or any
reimbursement of expenses paid to Employee shall, on audit or other
examination of Employer's income tax returns, be determined not to be
allowable deductions from Employer's gross income, and in the further event
that this determination shall be acceded to by the Employer or made final by
the
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appropriate federal or state taxing authority or a final judgment of a court
of competent jurisdiction, and no appeal is taken from the judgment or the
applicable period for filing notice of appeal has expired, Employee shall
repay to Employer the full amount of the disallowed expenses.
ARTICLE 8. TERMINATION OF EMPLOYMENT
TERMINATION FOR CAUSE
Section 8.01. (a) Employer reserves the right to terminate this
agreement if Employee wilfully breaches or habitually neglects the duties
which he is required to perform under the terms of this agreement; or commits
such acts of dishonesty, fraud, misrepresentation or other acts of moral
turpitude as would prevent the effective performance of his duties.
(b) Employer may at its option terminate this agreement for the reasons
stated in this Section by giving forty-five (45) days written notice of
termination to Employee without prejudice to any other remedy to which
Employer may be entitled either at law, in equity, or under this agreement.
(c) The notice of termination required by this section shall specify
the ground for the termination and shall be supported by a statement of all
relevant facts.
(d) Termination under this section shall be considered "for cause" for
the purposes of this agreement.
TERMINATION WITHOUT CAUSE
Section 8.02 (a) This agreement shall be terminated upon the death of
Employee.
(b) Employer reserves the right to terminate this agreement not less
than six (6) months after Employee suffers any physical or mental disability
that would prevent the performance of his duties under this agreement. Such
a termination shall be effected by giving forty-five (45) days' written
notice of termination to Employee. Termination pursuant to this provision
shall not prejudice Employee's rights to continued compensation pursuant to
Article 4 of this agreement.
(c) Termination under this section shall not be considered "for cause"
for the purposes of this agreement.
EFFECT OF MERGER, TRANSFER OF ASSETS, OR DISSOLUTION
Section 8.03 (a) This agreement shall be terminated by any voluntary or
involuntary dissolution of Employer; provided, however, that if said
dissolution is the result of either a
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merger or consolidation in which Employer is not the consolidated or
surviving corporation, or a transfer of all or substantially all of the
assets of Employer, then at the option of Employee, he shall be entitled to
be paid the balance remaining under this agreement as a condition precedent
to the above-specified events.
PAYMENT ON TERMINATION
Section 8.04. Notwithstanding any provision of this agreement, if
Employer terminates this agreement at any time prior to its expiration
regardless of cause, it shall pay Employee, as a condition thereof, an amount
equal to one and one-half (1 1/2) years annual salary at the then current
rate of compensation.
TERMINATION BY EMPLOYEE
Section 8.06. Employee may terminate his obligations under this
agreement by giving Employer at least a two (2) months notice in advance.
ARTICLE 9. GENERAL PROVISIONS
NOTICES
Section 9.01. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service, or to the extent receipt is confirmed, telecopy,
telefax, or other electronic transmission service to the appropriate address
or number as set forth below. Notices shall be addressed to:
Nurescell, Inc.
2030 Main Street
Irvine, California 92677
Facsimile:
Adrian Joseph
27451 Maverick Circle
Laguna Hills, California 92653
Facsimile: (949) 425-3982
ATTORNEYS' FEES AND COSTS
Section 9.02. If any legal action based in contract law is necessary to
enforce or interpret the terms of this agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs, and necessary disbursements
in addition to any other relief to which that party may be entitled. This
provision shall be construed as applicable to the entire contract.
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ENTIRE AGREEMENT
Section 9.03. This agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this agreement acknowledges that no
representation, inducements, promises, or agreements, orally or otherwise,
have been made by any party, or anyone acting on behalf of any party, which
are not embodied herein, and that no other agreement, statement, or promise
not contained in this agreement shall be valid or binding on either party.
MODIFICATIONS
Section 9.04. Any modification of this agreement will be effective only
if it is in writing and signed by the party to be charged.
EFFECT OF WAIVER
Section 9.05. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this agreement
by the other party shall not be deemed a waiver of that term, covenant, or
condition, nor shall any waiver or relinquishment of any right or power at
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.
PARTIAL INVALIDITY
Section 9.06. If any provision in this agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired
or invalidated in any way.
LAW GOVERNING AGREEMENT
Section 9.07. This agreement shall be governed by and construed in
accordance with the laws of the State of California. The parties agree to
submit to the jurisdiction and venue of the Orange County Superior Court.
SUMS DUE DECEASED EMPLOYEE
Section 9.08. If Employee dies prior to the expiration of the term of
his employment, any sums that may be due him from Employer under this
agreement as of the date of death shall be paid to Employee's spouse, if any,
or if employee is not married, then to his heirs.
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ARTICLE 10. APPROVAL OF THE BOARD OF DIRECTORS
Section 10.01. The Board of Directors has approved the terms of this
Agreement and shall execute an appropriate resolution which shall be
certified by the Secretary thereof.
ARTICLE 11. COUNTERPARTS; EXECUTION BY FACSIMILE
Section 11.01. This Agreement and/or any amendments to this Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. This Agreement is effective when each party has received an
executed version transmitted to such party via facsimile by the other party.
Executed on ___________, 19_____, at _________________, California.
EMPLOYER EMPLOYEE
NURESCELL, INC., a Nevada
Corporation
- ------------------------------- ------------------------------------
ADRIAN JOSEPH
By
-----------------------------
Chairman of the Board
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SALE OF TECHNOLOGY
This Agreement is being entered into as of the 12th day of June, 1998 by
and between ADRIAN A. JOSEPH ("A.A.J") and NURESCELL, a Nevada corporation
("Company").
WHEREAS, A.A.J. has developed certain technologies as more specifically
described in Schedule A hereto (the "Technologies"); and
WHEREAS, the Company desire to acquire all of his right, title and
interest in and to said the Technologies and A.A.J. desires to sell, transfer
and assign the Technologies to the Company; and
WHEREAS, the Company has agreed to purchase said the Technologies for an
eighty (80%) percent ownership interest in the Company.
For mutual promises and covenants contained herein, the parties herewith
agree as follows:
ARTICLE I
PURCHASE AND SALE OF TECHNOLOGIES
1.1 PURCHASE AND SALE OF TECHNOLOGIES. Pursuant to the terms and
conditions of this Agreement, A.A.J. hereby sells, conveys, assigns,
transfers and delivers to the Company good and marketable title in and to
those certain Technologies described in Schedule A hereof, and the Company
herewith agrees to purchase said Technologies for the consideration set forth
in paragraph 1.2. Said Technologies are being transferred free and clear of
all liens, claims, mortgages, encumbrances, security interest and any other
legal restrictions whatsoever.
1.2 CONSIDERATION.
(a) Pursuant to the determination of the Board of Directors
of the Company and in reliance on independent appraisal of said Technologies,
and based upon the representations and warranties of A.A.J. contained herein,
the Company herewith agrees to purchase said Technologies for shares of
Company common stock equal to eighty (80%) percent of the outstanding shares
of common stock of the Company, equaling 10,000,000 shares of common stock.
It is intended that the common stock shall have a par value of $0.001 per
share. Said shares shall be delivered forthwith to A.A.J. The sale of said
shares for the Technology is intended to comply with Section 351 of the
Internal Revenue Code as amended.
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EXHIBIT 6.2
<PAGE>
(b) The Company's common stock has not yet been registered
under the Securities and Exchange Act of 1933 or amendments thereto (the
"Act") or any state securities acts and is being issued in reliance upon
certain exceptions contained in federal and state securities laws. It is
acknowledged that there are substantial restrictions on the transferability
of the common stock of the Company. The shares of the Company are being
acquired solely for the account of A.A.J. It is understood that A.A.J.
intends to hold said stock subject to the restrictions thereon and has not
entered into any contract undertaking, agreement or arrangement to dispose of
said stock upon receipt or otherwise, except pursuant to federal and state
securities laws as may be applicable.
(c) It is understood by A.A.J. that each certificate
representing the shares of the Company, which shall be issued hereunder and
any other securities issued with respect to the shares of the Company, upon
stock split, dividend, recapitalization, merger, consolidation or similar
event (unless otherwise permitted or unless the shares of the common stock of
the Company evidenced by such certificate shall have been registered under
the Act), shall be stamped or otherwise imprinted with a legend substantially
in the following form (in addition to any legend that may be required under
applicable securities law):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF
COUNSEL SATISFACTION TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
(d) Upon request of the holder of such a certificate, the
Company shall remove the foregoing legend from the certificate or issue to
such holder a new certificate therefore free of any transfer legend, if, with
such request, the Company shall have received either (I) an opinion of legal
counsel to be approved by the Company, which approval shall not be
unreasonably withheld nor unduly delayed, indicating that said shares may be
transferred without registration under the Act by reason of an exemption from
the registration provisions of said Act, or (ii) a "no-action" letter from
the Securities and Exchange Commission ("SEC") to the effect that any
transfer by such holder of the securities evidenced by such certificate will
not violate the Act and applicable state securities laws.
(e) The Company common stock issuable to A.A.J. hereunder
shall not be transferable, except upon the conditions specified in this
Agreement, which conditions are intended among other things, to insure
compliance with the provisions of the Act, A.A.J. agrees
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to cause any proposed transferee of the shares of the Company common stock to
agree to take and hold those securities subject to the provisions and upon
the conditions specified in this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF A.A.J.
A.A.J. hereby represents, covenants and warrants to the Company as follows:
2.1 AUTHORIZATION ETC. A.A.J. has full power and authority to enter
into this Agreement and to carry out the transactions contemplated hereby.
The Associates of A.A.J. has taken all action required by law to authorize
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, and, this Agreement is a valid and binding
agreement of A.A.J. enforceable in accordance with its terms.
2.2 NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation of the transaction contemplated hereby will
violate any provision of the A.A.J., or violate, or be in conflict with, or
constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance upon any
property or assets of A.A.J. under, any agreement or commitment to which the
Company is a party or by which A.A.J. is bound, or to which the property of
A.A.J. is subject, or violate any statute or law or any judgment, decree,
order, regulation or rule of any court or government authority.
2.3 TITLE TO TECHNOLOGY. A.A.J. owns and has the full and exclusive
right to use the Technology and the know-how and processes used in or
necessary in connection with the Technology. A.A.J. has the sole and
exclusive right to use and to assign and transfer the Technology and the
know-how and processes referred to in the Disclosure Schedule, and the
consummation of the transactions contemplated hereby will not alter or impair
any such rights: on claims have been asserted by any person to the use of the
Technology and the know-how or processes or thereto, and A.A.J. does not know
of any valid basis for any such claim; and the use of the Technology and the
know-how or processes do not infringe on the rights of any person.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, covenants and warrants to the Company as
follows:
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3.1 CORPORATE ORGANIZATION: ETC. The Company is a corporation duly
organized validly existing and in good standing under the laws of the State
of Nevada and has full corporate power and authority to carry on its business
as it is now being conducted and to own the properties and asserts it now
owns.
3.2 AUTHORIZATION, ETC.. The Company has full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of the Company has taken all
action required by law, the Company's Certificate of Incorporation, its
By-Laws or otherwise to be taken by it to authorize the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, and this Agreement is a valid and binding agreement of
the Company enforceable in accordance with its terms.
3.3 NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation of the transaction contemplated hereby will
violate any provision of the Certificate of Incorporation or By-Laws of the
Company, or violate, or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, any agreement or commitment to which the Company is a party
or by which the Company is bound, or to which the property of the Company is
subject, or violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority.
3.4 CONSENTS AND APPROVALS OF GOVERNMENT AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or registration with,
any governmental or regulatory authority is required in connection with the
execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby.
3.5 The Company herewith represents and warrants that the purchase of
said Technology by Company for the shares specified herein has been approved
by a duly authorized and properly scheduled meeting of the Board of
Directors. A certified copy of the Board of Directors resolution authorizing
the sale of said shares to A.A.J. for the Technology shall be provided to
A.A.J. upon request.
3.6 The Company further certifies that it has through independent
means determined the value of said Technology which is equal to the sum of
$5,000,000.
3.7 The Company agrees that for a period of five years after the
issuance of said above described shares of stock of Company, it shall not
take any action which will result in a dilution of the ownership A.A.J. in
accordance with this Agreement, except by written prior acceptance of same by
A.A.J. Nothing contained herein shall prevent Company from issuing additional
shares, however, the Company shall maintain the ownership ratio set forth in
this Agreement unless and until A.A.J. consents to dilution of his shares for
a period of three years from the date of execution of this Agreement.
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ARTICLE IV
SURVIVAL OF REPRESENTATIONS AND WARRANTS
4.1 INVESTIGATIONS; SURVIVAL OF WARRANTIES. The respective
representations and warrants of the Company and A.A.J. contained herein or in
any certificates or other documents delivered herewith or prior hereto shall
not be deemed waived or otherwise affected by any investigation made by any
party hereto. Each and every such representation and warranty shall survive
the execution hereof for a period of one (1) year.
ARTICLE V
SPECIAL REPRESENTATIONS REGARDING TECHNOLOGY
A.A.J. herewith represents and warrants that said Technology is new and
not yet subject to the issuance of a patent. There is no guarantee that any
patent shall ever be issued with respect to said Technology, nor that said
Technology will be commercially marketable.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 WAIVER OF COMPLIANCE. Any failure of the Company, on the one
hand, or on the other, to comply with any obligation, covenant, agreement or
condition herein may be expressly waived in writing by the Chairman of the
Board, President or Secretary of the Company, respectively, but such waiver
or failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
6.2 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given if delivered by hand or mailed, certified or registered
mail with postage prepaid:
(a) If to A.A.J.
27451 Maverick Circle,
Laguna Hills, CA 92653
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or to such other person or address as A.A.J. furnish to the Company in
writing.
(b) If to the Company, to:
Nurescell Inc.
2030 Main St.
Irvine, CA 92615
(copy to)
Eric I. Michelman, Esq.
Law Office of Eric I. Michelman
2301 Dupont Drive, Suite 530
Irvine, CA 92612
or to such other person or address as the Company shall furnish to A.A.J. in
writing.
6.3 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and insure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned
by any of the parties hereto without the prior written consent of the other
parties.
6.4 GOVERNING LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and constructed in accordance with the
laws of the State of Nevada.
6.5 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
6.6 HEADINGS. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
6.7 ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits hereto, the Disclosure Schedules and the other documents and
certificates delivered pursuant to the terms hereof, set forth the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and supersede all prior agreements, promises,
covenants, arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or representative of any
party hereto.
6.8 THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or corporation other than the parties
hereto and their successors or assigns, any rights or remedies under or by
reason of this Agreement.
6
<PAGE>
6.9 ARBITRATION. Any dispute or claim arising under or with respect
to this Agreement will be resolved by arbitration in Orange County, CA, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a panel of three (3) arbitrators, one appointed by A.A.J.
and Associates, one appointed by NRC and the third appointed by said
Association. The decision or award of a majority of the arbitrators shall be
final and binding upon the parties. Any arbitral award may be entered as a
judgment or order in any court of competent jurisdiction.
I WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be affixed
hereto, all as of the day and year first above written.
Seal: A.A.J. and Associates
Attest: By:
---------------------------------
Nurescell, Inc.
- ----------------------------
Title: Secretary By:
---------------------------------
7
<PAGE>
EXHIBIT I
SECTION 1.1(b)
<TABLE>
<CAPTION>
<S> <C>
SALE OF MATERIALS AND SAMPLES TO THE COMPANY
- --------------------------------------------
Resins, Powders, Components $14,000.00
Molds, Mixers, Tools 7,000.00
Books and Research Materials 7,500.00
Pre-Operating Expanses 5,500.00
TOTAL $34,000.00
- ----- ----------
</TABLE>
This amount will be paid to "A.A.J." in cash out of the PRIVATE PLACEMENT, or
PUBLIC OFFERING, funds raised by the Company.
<PAGE>
EMPLOYMENT AGREEMENT
Employment Agreement, between Nurescell Inc., (the "Company") and Sharon
Nitka (the "Employee").
1. For good consideration, the Company employs the Employee on the
following terms and conditions.
2. Term of Employment: Subject to the provisions for termination set
forth below this agreement will begin on June 01,1998, unless sooner terminated.
3. Salary: The Company shall pay Employee a salary of $$36000.00 per
year, for the services of the Employee, payable at regular payroll periods.
4. Duties and Position: The Company hires the Employee in the capacity
of . The Employee's duties may be reasonably modified at the Company's
direction from time to time.
5. Employee to Devote Full Time to Company: The Employee will devote full
time, attention, and energies to the business of the Company and during this
employment, will not engage in any other business activity, regardless of
whether such activity is pursued for profit, gain, or other pecuniary advantage.
Employee is not prohibited from making personal investments in any other
businesses provided those investments do not require active involvement in the
operation of said companies.
6. Confidentiality of Proprietary Information: Employee agrees, during
or after the term of this employment, not to reveal confidential information,
or trade secrets to any person, firm, corporation, or entity. Should Employee
reveal or threaten to reveal this information, the Company shall be entitled
to an injunction restraining the Employee from disclosing same, or from
rendering any services to any entity to whom said information has been or is
threatened to be disclosed. The right to secure an injunction is not
exclusive, and the Company may pursue any other remedies it has against the
Employee for a breach or threatened breach of this condition, including the
recovery of damages from the Employee.
7. Reimbursement of Expenses: The Employee may incur reasonable
expenses for furthering the Company's business, including expenses for
entertainment, travel, and similar items. The Company shall reimburse
Employee for all business expenses after the Employee presents an itemized
account of expenditures, pursuant to Company policy.
8. Vacation: The Employee shall be entitled to a yearly vacation of
weeks at full pay.
9. Disability: If Employee cannot perform the duties because of
illness or incapacity for a period of more than weeks, the compensation
otherwise due during said illness or incapacity will be reduced by ( )
percent. The Employee's full compensation will be reinstated upon return to
work. However, if the Employee is absent from work for any reason for a
continuous period of over months, the Company may terminate the Employee's
employment, and the company's obligations under this agreement will cease on
that date.
10. Termination of Agreement: Without cause, the Company may terminate
this agreement at any time upon days' written notice to the Employee. If
the Company requests, the Employee will continue to perform his/her duties
and be
EXHIBIT 6.3
<PAGE>
paid his/her regular salary up to the date of termination. In addition, the
Company will pay the Employee on the date of termination a severance allowance
of $ less taxes and social security required to be withheld. Without cause, the
Employee may terminate employment upon 14 days' written notice to the Company.
Employee may be required to perform his/her duties and will be paid the regular
salary to date of termination but shall not receive a severance allowance.
Notwithstanding anything to the contrary contained in this agreement, the
Company may terminate the Employee's employment upon days' notice to the
Employee should any of the following events occur:
a) The sale of substantially all of the Company's assets to a single
purchaser or group of associated purchasers; or
b) The sale, exchange, or other disposition, in one transaction of the
majority of the Company's outstanding corporate shares; or
c) The Company's decision to terminate its business and liquidate its
assets;
d) The merger or consolidation of the Company with another company.
e) Bankruptcy or Chapter 11 Reorganization.
11. Death Benefit: Should Employee die during the term of employment, the
Company shall pay to Employee's estate any compensation due through the end of
the month in which death occurred.
12. Restriction on Post Employment Compensation: For a period of ( )
years after the end of employment, the Employee shall not control, consult to
or be employed by any business similar to that conducted by the Company,
either by soliciting any of its accounts or by operating within Employer's
general trading area.
13. Assistance in Litigation: Employee shall upon reasonable notice,
furnish such information and proper assistance to the Company as it may
reasonably require in connection with any litigation in which it is, or may
become, a party either during or after employment.
14. Effect of Prior Agreements: This agreement supersedes any prior
agreement between the Company or any predecessor of the Company and the
Employee, except that this agreement shall not affect or operate to reduce any
benefit or compensation inuring to the Employee of a kind elsewhere provided and
not expressly provided in this agreement.
15. Settlement by Arbitration: Any claim or controversy that arises out of
or relates to this agreement, or the breach of it, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. Judgment upon the award rendered may be entered in any court with
jurisdiction.
16. Limited Effect of Waiver by Company. Should Company waive breach of
any provision of this agreement by the Employee, that waiver will not operate or
be construed as a waiver of further breach by the Employee.
17. Severability: If, for any reason, any provision of this agreement is
held invalid, all other provisions of this agreement shall remain in effect. If
this agreement is held invalid or cannot be enforced, then to the full extent
permitted by law any prior agreement between the Company (or any predecessor
thereof) and the Employee shall be deemed reinstated as if this agreement had
not been executed.
18. Assumption of Agreement by Company's Successors and Assignees: The
Company's rights and obligations under this agreement will inure to the benefit
and be binding upon the Company's successors and assignees.
19. Oral Modifications Not Binding. This instrument is the entire
agreement of the Company and the Employee. Oral changes shall have no effect.
It may be altered only by a written agreement signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge
is sought.
Signed this 1st day of June, 1998.
/s/ Adrian A. Joseph /s/ Sharon Nitka
- --------------------------------- -----------------------------------
Company President Employee
<PAGE>
CONSULTING AGREEMENT
This Agreement, by and between John Longenecker, Consultant, and Nurescell,
Inc., a Nevada Corporation, Client, will delineate the terms agreed upon between
Consultant and Client whereby Consultant will perform certain duties for and on
behalf of Client over the Term of the agreement as required by Client and to the
satisfaction of the Client.
WHEREAS, John Longenecker is presently associated with Nurescell, Inc. as a
member of its Board of Directors, and
WHEREAS, Nurescell, Inc. has expressed a desire and a need to have more of the
time of Mr. Longenecker than would normally be expected of a member of the Board
of Directors, Nurescell, Inc., has determined that it would be in its best
interest to have Mr. Longenecker spend whatever portion of this time as is
needed to consult with Nurescell, Inc. on a range of matters concerning the
present and the future of Nurescell, Inc.
THEREFORE, BE IT AGREED
That John Longenecker, hereafter known as consultant, together with any
person with whom he may associate himself for the purpose of fulfilling the
requirements of this agreement, agrees to devote that percentage of his full
time as may be required for this purpose. It is anticipated that at the
start, since Nurescell, Inc., hereafter known as Client, is presently in the
start-up phase that the percent of the Consultant's time will be between 25%
to 30%.
It is also agreed that if and when a larger or lesser percent of Consultant's
time is required that an appropriate adjustment of the proposed consulting fee
will be made. It is further agreed that certain adjustments to the monthly
consulting fee may be made as agreed upon between Consultant and Client from
time based on inflation or other appropriate factors.
It is agreed that, given the availability of electronic communications
facilities, Consultant will make the choice of working from his own office or
working in the offices of the client, in laboratories or other locations
appropriate to the work performed by Consultant for the Client.
It is further agreed that the starting fee will be $2000.000 per month plus any
out of pocket expenses such as travel or other expenses related to the carrying
out of this agreement as approved by Client in advance.
EXHIBIT 6.4
<PAGE>
Concerning the life of this agreement, it is agreed that this agreement will
continue in effect until terminated by either party hereto giving thirty days
advance notice of termination to the other party in writing or by mutual consent
of both parties hereto, with both parties agreeing in writing to the terms of
the termination.
The effective date of this agreement will be June 26, 1998.
AGREED AGREED
John Longenecker Nurescell, Inc.
/s/ John Longenecker /s/ Adrian Joseph
- -------------------- ----------------------------
John Longenecker By Adrian Joseph, President
Page 2 of 2
<PAGE>
CONSULTING AGREEMENT
This Agreement, by and between William A. Wilson, Consultant, and Nurescell,
Inc., a Nevada Corporation, Client, will delineate the terms agreed upon between
Consultant and Client whereby Consultant will perform certain duties for and on
behalf of Client over the term of the agreement as required by Client and to the
satisfaction of the Client.
WHEREAS, William A. Wilson is presently associated with Nurescell, Inc. as a
member of its Board of Directors, and
WHEREAS, Nurescell, Inc. has expressed a desire and a need to have more of the
time of Mr. Wilson than would normally be expected of a member of the Board of
Directors, Nurescell, Inc. has determined that it would be in its best interests
to have Mr. Wilson spend whatever portion of his time as is needed to consult
with Nurescell, Inc. on a range of matters concerning the present and the future
of Nurescell, Inc.
THEREFORE, BE IT AGREED
That William Wilson, hereafter known as Consultant, together with any person
with whom he may associate himself for the purpose of fulfilling the
requirements of this agreement, agrees to devote that percentage of his full
time as may be required for this purpose. It is anticipated that at the
start, since Nurescell, Inc., hereinafter known as Client, is presently in
the start-up phase that the percent of the Consultant's time will be between
25% to 30%.
It is also agreed that if and when a larger or lesser percent of Consultant's
time is required that an appropriate adjustment of the proposed consulting fee
will be made. It is further agreed that certain adjustments to the monthly
consulting fee may be made as agreed upon between Consultant and Client from
time to time based on inflation or other appropriate factors.
It is agreed that, given the availability of electronic communications
facilities, Consultant will make the choice of working from his own office or
working in the offices of the client, in laboratories or other locations
appropriate to the work being performed by Consultant for the Client.
It is further agreed that the starting fee will be $2,000.00 per month plus any
out of pocket expenses such as travel or other expenses related to the carrying
out of this agreement as approved by Client in advance. It is also agreed that
the initial retainer fee will be $7,000.00 which will be due on the date of the
signing of this agreement by both parties hereto.
Page 1 of 2
EXHIBIT 6.5
<PAGE>
Concerning the life of this agreement, it is agreed that this agreement will
continue in effect until terminated by either party hereto giving thirty days
advance notice of termination to the other party in writing or by, mutual
consent of both parties hereto, with both parties agreeing in writing to the
terms of the termination.
The effective date of this agreement will be June 10, 1998.
AGREED AGREED
William A. Wilson Nurescell, Inc.
/s/ William A. Wilson /s/ Adrian Joseph
- --------------------- ----------------------------
William A. Wilson By Adrian Joseph , President
Page 2 of 2
<PAGE>
CONSULTING AGREEMENT
This Agreement, by and between Rita Lavelle, Consultant, and Nurescell, Inc., a
Nevada Corporation, Client, will delineate the terms agreed upon between
Consultant and Client whereby Consultant will perform certain duties for and on
behalf of Client over the Term of the agreement as required by Client and to the
satisfaction of the Client.
WHEREAS, Rita Lavelle is presently associated with Nurescell, Inc. as a member
of its Board of Directors, and
WHEREAS, Nurescell, Inc. has expressed a desire and a need to have more of the
time of Mrs. Lavelle than would normally be expected of a member of the Board of
Directors, Nurescell, Inc., has determined that it would be in its best interest
to have Mrs. Lavelle spend whatever portion of this time as is needed to consult
with Nurescell, Inc. on a range of matters concerning the present and the future
of Nurescell, Inc.
THEREFORE, BE IT AGREED
That Rita Lavelle, hereafter known as consultant, together with any person with
whom he may associate himself for the purpose of fulfilling the requirements of
this agreement, agrees to devote that percentage of his full time as may be
required for this purpose. It is anticipated that at the start, since Nurescell,
Inc., hereafter known as Client, is presently in the start-up phase that the
percent of the Consultant's time will be between 25% to 30%.
It is also agreed that if and when a larger or lesser percent of Consultant's
time is required that an appropriate adjustment of the proposed consulting fee
will be made. It is further agreed that certain adjustments to the monthly
consulting fee may be made as agreed upon between Consultant and Client from
time based on inflation or other appropriate factors.
It is agreed that, given the availability of electronic communications
facilities, Consultant will make the choice of working from his own office or
working in the offices of the client, in laboratories or other locations
appropriate to the work performed by Consultant for the Client.
It is further agreed that the starting fee will be $2000.000 per month plus any
out of pocket expenses such as travel or other expenses related to the carrying
out of this agreement as approved by Client in advance.
EXHIBIT 6.6
<PAGE>
Concerning the life of this agreement, it is agreed that this agreement will
continue in effect until terminated by either party hereto giving thirty days
advance notice of termination to the other party in writing or by mutual consent
of both parties hereto, with both parties agreeing in writing to the terms of
the termination.
The effective date of this agreement will be June 1st, 1998.
AGREED AGREED
Rita Lavelle Nurescell, Inc.
/s/ Rita Lavelle /s/ Adrian Joseph
- ----------------------- ----------------------------
Rita Lavelle By Adrian Joseph, President
Page 2 of 2
<PAGE>
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933; THEY HAVE BEEN ACQUIRED BY THE HOLDER FOR
INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF
1933, AND THE RULES AND REGULATIONS PROMULGATED HEREUNDER AND APPLICABLE
STATE SECURITIES LAWS.
1998 STOCK OPTION PLAN OF NURESCELL INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made by and between
Nurescell Inc., a Nevada corporation (the "Company"), and _______________
__________________ (the "Optionee") as of the date set forth herein below.
RECITALS
A. The Board of Directors of the Company (the "Board") has established
the 1998 Stock Option Plan of the Company (the "Plan"), for the purpose of
providing to Employees, Directors and consultants of the Company and others
an opportunity to acquire shares of the Company's Common Stock, par value
$.0001 per share (the "Shares"); and
B. The Company's Board of Directors or the Stock Option Committee of the
Company's Board of Directors (the "Committee") appointed to administer the
Plan has determined that it would be to the advantage and best interest of
the Company and its shareholders to grant the stock option provided for
herein (the "Option") to the Optionee as an inducement to continue to provide
services to the Company and as an incentive for increased efforts during such
service, and to make the Options qualify under Rule 701 promulgated pursuant
to the Securities Act of 1933, as amended, and Section 25102(o) of the
California Corporation Code has advised the Company thereof and instructed it
to issue the Option.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. Capitalized terms used herein and not otherwise defined shall have
the meaning set forth in the Plan. The masculine pronoun shall
1
<PAGE>
include the feminine and neuter, and the singular the plural, where the
context so indicates.
SECTION 1.1 - CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.2 - COMPANY
"Company" shall mean Nurescell Inc. In addition, "Company" shall mean any
corporation assuming, or issuing new employee stock options in substitution
for the Option and Incentive Stock Options (as defined in Section 1.7 of the
Plan), outstanding under the Plan, in a transaction to which Section 425(a)
of the Code applies.
SECTION 1.3 - OPTION
"Option" shall mean the stock option to purchase Common Stock of the
Company granted under this Agreement.
SECTION 1.4 - PLAN
"Plan" shall mean the 1998 Stock Option Plan of the Company.
SECTION 1.5 - SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.6 - SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 1.7 - SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain then owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
SECTION 1.8 - TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the
employee-employer relationship, directorship or other relationship between
the Optionee and the Company or a Subsidiary is terminated for any reason,
with or without cause, including, but not by way of limitation, a termination
by resignation, discharge, death or retirement, but excluding terminations
where there is
2
<PAGE>
a simultaneous reemployment of the Optionee by the Company or a Subsidiary.
The Committee, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a termination of
Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Termination of employment.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
In consideration of the Optionee's agreement to render faithful and
efficient services to the Company and for other good and valuable
consideration, on the date set forth on the Signature Page hereof (the "Date
of Grant"), the Company irrevocably grants to the Optionee the option to
purchase any part or all of an aggregate of the number of Shares set forth on
the Signature Page hereof and upon the terms and conditions set forth in this
Agreement.
SECTION 2.2 - PURCHASE PRICE
The Purchase Price of the Shares covered by the Option shall be the
amount set forth on the Signature Page hereof and shall be without commission
or other charge (the "Purchaser Price").
SECTION 2.3 - RESERVATION OF RIGHTS
Nothing in the Plan or in this or any Stock Option Agreement shall
confer upon the Optionee any right to continue in the employ of the Company
or any Subsidiary or shall interfere with or restrict in any way the rights
of the Company and its Subsidiaries, which are hereby expressly reserved, to
discharge the Optionee at any time for any reason whatsoever, with or without
cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
In the event that the outstanding Shares subject to the Option are
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend, or combination of shares, the Committee shall make an appropriate
and equitable adjustment in the number and kind of Shares as to which the
Option, or portions thereof then unexercised, shall be exercisable, to the
end that after such event the Optionee's proportionate interest shall be
maintained as before the occurrence of such event. Such adjustment in the
Option shall be made without change in the total price applicable to the
unexercised portion of the Option (except for any change in the aggregate
price resulting from round-off of share quantities or prices) and with any
necessary corresponding adjustment in the Purchase Price. Any such adjustment
made by the Committee shall be final and binding upon the Optionee, the
Company, the Subsidiaries and all other interested persons.
3
<PAGE>
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) The Option shall become exercisable as described on the signature
page hereto.
(b) Excluding Saturdays, Sundays, and nationally recognized holidays,
if the Optionee is absent from employment for any reason other than vacation
for an aggregate period exceeding sixty (60) days during the annual period
between the Date of Grant and the First Anniversary Date or any successive
Anniversary Date and the following Anniversary Date, then the latter
Anniversary Date shall be postponed by the number of all such days of
absence. This paragraph (b) shall not apply to Optionees who are Directors
and consultants of the Company but not Employees of the Company.
SECTION 3.2 - DURATION OF EXERCISABILITY
Any installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under the Plan.
SECTION 3.3 - ASSUMPTION OF OPTION; ACCELERATION OF EXERCISABILITY
In the event of the merger or consolidation of the Company with or into
another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or
more of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, such Option shall be assumed or an equivalent
option substituted by any successor corporation of the Company. The Company
undertakes to make reasonable and adequate provision for such assumption or
substitution of the Option upon or in connection with such merger,
consolidation, acquisition, liquidation, or dissolution. The Committee may
also, in its absolute discretion and upon such terms and conditions as it
deems appropriate, by resolution adopted prior to such event, provide that at
some time prior to the effective date of such event this Option shall be
exercisable as to all of the Shares covered hereby, notwithstanding that this
Option may not yet have become fully exercisable under Section 3.1.
SECTION 3.4 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts, or engagements of the Optionee or
his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment, or any other means
whether such disposition be voluntary or involuntary or by operation of law,
by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof
shall be null and void and of no effect; provided, however, that this Section
3.5 shall not prevent transfers by will or by the applicable laws of descent
and distribution.
4
<PAGE>
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only he or she may exercise the
Option or any portion thereof. After the death of the Optionee, any
exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable, be exercised by his or her personal representative or
by any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under the
Plan; provided, however, that each partial exercise shall be for not less
than one hundred (100) Shares (or the minimum installment set forth on the
signature page hereto, if a smaller number of Shares) and shall be for whole
Shares only.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely
by delivery to the Secretary or the Secretary's office of all of the
following prior to the time when the Option or such portion becomes
unexercisable under the Plan:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option of portion thereof, stating that the Option
or portion thereof is thereby exercised, such notice complying with all
applicable rules established by the Committee; and
(b) (i) Full payment (in cash or by check) for the Shares with respect
to which such Option or portion is exercised; or
(ii) Shares of any class of the Company's stock owned by the
Optionee duly endorsed for transfer to the Company with a fair
market value on the date of delivery equal to the aggregate
Purchase Price of the Shares with respect to which such Option or
portion is thereby exercised, or options duly endorsed having an
aggregate value (measured by the difference between fair market
value of the Shares and the Purchase Price) equal to the aggregate
Purchase Price of the Shares with respect to which such Option or
portion thereof is thereby exercised; or
(iii) A promissory note bearing interest (at least such rate as
shall then preclude the imputation of interest under the Code or
any successor provision) and payable upon such terms as may be
prescribed by the Committee. The Committee may also
5
<PAGE>
prescribe the form of such note and the security to be given for
such note. No option may, however, be exercised by delivery of a
promissory note or by a loan from the Company when or where such
loan or other extension of credit is prohibited by law; or
(iv) Any combination of the consideration provided in the
foregoing subsections (i), (ii), and (iii), and
(c) Full payment to the Company of all amounts which, under federal,
state or local law, the Company is required to withhold upon exercise of the
Option; and
(d) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option.
SECTION 4.4 - CONDITIONS OF ISSUANCE OF STOCK CERTIFICATES
The Shares deliverable upon the exercise of the Option, or any portion
thereof, may be either previously authorized but unissued Shares or issued
Shares which have then been reacquired by the Company. Such Shares shall be
fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for Shares purchased upon the
exercise of the Option or portion thereof prior to fulfillment of the
following conditions:
(a) Either the completion of any registration or other qualification of
such Shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other Governmental
regulatory body, which the Committee shall, in its absolute discretion, deem
necessary or advisable, or the receipt of an opinion of counsel satisfactory
to the Committee that the Shares were issued pursuant to exemptions under
both state and federal law;
(b) The obtaining of any approval or other clearance from any state or
federal governmental agency which the committee shall, in its absolute
discretion, determine to be necessary or advisable;
(c) The payment to the Company of all amounts which, under federal,
state, or local law, it is required to withhold upon exercise of the Option;
SECTION 4.5 - RIGHTS AS A STOCKHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any Shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such Shares shall have been issued by the Company
to such holder.
6
<PAGE>
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee or the Special Committee in good faith
shall be final and binding upon the Optionee, the Company, the Subsidiaries
and all other interested persons. No member of the Committee or the Special
committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In
its absolute discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan and
this Agreement.
SECTION 5.2 - SHARES TO BE RESERVED
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of this Agreement.
SECTION 5.3 - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to
be given to the Optionee shall be addressed to him or her at the address set
forth on the Signature Page hereof. By a notice given pursuant to this
Section 5.3, either party may hereafter designate a different address for
delivery of notices. Any notice which is required to be given to the Optionee
shall, if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of
his status and address by written notice under this Section 5.3. Any notice
shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid and deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.
SECTION 5.4 - TITLES
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.
SECTION 5.5 - CONSTRUCTION
This Agreement shall be administered, interpreted, and enforced under
the laws of the State of California.
[NEXT PAGE FOLLOWING IS THE SIGNATURE PAGE]
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SIGNATURE PAGE
1998 STOCK OPTION AGREEMENT OF NURESCELL INC.
______ Incentive Stock Option
______ Non-Qualified Option
Purchase/Exercise Price per Share: $__________
Number of Shares: _____________
Vesting: ______% each year, for ____ years; first portion vesting _____________
I have read the Stock Option Agreement indicated above which was adopted
for use in connection with the 1998 Stock Option Plan. I have also received
and reviewed a copy of the 1998 Stock Option Plan. As Optionee, I hereby
agree to all of the terms of the Agreement.
Date of Grant: ____________________ ____________________________________
Optionee Signature
____________________________________
Optionee Name (Please Print)
____________________________________
____________________________________
Address
Optionee Social Security Number or
Taxpayer Identification Number:
____________________________________
The Company hereby agrees to all of the terms of the Agreement.
NURESCELL INC.
By: ________________________________
Name: ______________________________
Its: _______________________________
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<PAGE>
1998 STOCK OPTION PLAN
OF
NURESCELL INC.
Nurescell Inc., organized under the laws of the State of Nevada (the
"Company"), hereby adopts this 1998 Stock Option Plan of Nurescell (the
"Plan"). The purposes of this Plan are as follows:
(1) To further the growth, development, and financial success of the
Company by providing additional incentives to its directors, officers,
employees, consultants and employees of companies who do business with the
Company by assisting them to become owners of capital stock of the Company
and thus permitting them to benefit directly from its growth, development,
and financial success.
(2) To enable the Company to obtain and retain the services of the type
of directors, officers, employees and consultants considered essential to the
long-range success of the Company by providing and offering them an
opportunity to become owners of capital stock of the Company under options,
including options that are intended to qualify as "incentive stock options"
under section 422A of the Internal Revenue Code of 1986, as amended.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter, and the singular
shall include the plural where the context to indicates.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in Section 6.1.
"Companion Grant" shall have the definition set forth in Section 4.9
hereof.
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"Company" shall mean Nurescell Inc. In addition, "Company" shall mean
any corporation assuming, or issuing new employee stock options in
substitution for, options outstanding under the Plan, in a transaction to
which Section 425(a) of the Code applies.
"Director" shall mean a member of the Board.
"Employee" shall mean any employee (as defined in accordance with the
Regulations and Revenue rulings then applicable under Section 3401(c) of the
Code) of the Company, whether such employee is so employed at the time this
Plan is adopted or becomes so employed subsequent to the adoption of this
Plan.
"Incentive Stock Option" shall mean an Option which qualifies under
Section 422A of the Code and which is designated as an Incentive Stock Option
by the Committee.
"Non-Qualified Option" shall mean an Option which is not an Incentive
Stock Option and which is designated as a Non-Qualified Option by the
Committee.
"Officer" shall mean an officer of the Company.
"Option" shall mean an option to purchase capital stock of the Company
granted under the Plan. "Options" includes both Incentive Stock Options and
Non-Qualified Options.
"Optionee" shall mean a Director, Officer, Employee or consultant to
whom an Option is granted under the Plan.
"Plan" shall mean this 1998 Stock Option Plan of the Company.
"Secretary" shall mean the Secretary of the Company.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Termination of Employment" shall mean the time when the
employee-employer relationship or directorship between the Optionee and the
Company is terminated for any reason, with or without cause, including, but
not by way of limitation, a termination by resignation, discharge, death or
retirement, but excluding terminations where there is a simultaneous
reemployment by the Company. The Committee, in its absolute discretion, shall
determine the effect of all other matters and questions relating to
Termination of Employment, including, but not by way of limitation, the
question of whether a Termination of Employment resulted from a discharge for
good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that with respect
to Incentive Stock Options, a leave of absence shall constitute a Termination
of Employment if, and to the extent that, such leave of absence interrupts
employment for the purposes of Section 422A(a)(2) of the Code and the then
applicable Regulations and Revenue Rulings under said Section.
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ARTICLE II
SHARES SUBJECT TO PLAN
SECTION 2.1 - SHARES SUBJECT TO PLAN
The shares of stock subject to Options shall be shares of the Company's
Common Stock. The aggregate number of such shares which may be issued upon
exercise of Options shall not exceed Three Hundred and Sixty Thousand
(360,000).
SECTION 2.2 - LIMITATION ON INCENTIVE STOCK OPTIONS GRANTS
Subject to the overall limitations of Section 2.1, the aggregate fair
market value (determined as of the time the option is granted) of stock with
respect to which "incentive stock options" (within the meaning of Section
422A of the Code) are exercisable for the first time by any Director, Officer,
Employee or consultant of the Company in any calendar year (under the Plan and
all other incentive stock option plans of the Company) shall not exceed
$100,000 plus any unused limited carryover to such year.
SECTION 2.3 - UNEXERCISED OPTIONS
If any Option expires or is canceled without having been fully
exercised, the number of shares subject to such option but as to which such
Option was not exercised prior to its expiration or cancellation may again be
optioned hereunder, subject to the limitations of Sections 2.1 and 2.2.
SECTION 2.4 - CHANGES IN COMPANY'S SHARES
In the event that the outstanding shares of Common Stock of the Company
are hereafter changed into or exchanged for a different number of kind of
shares or other securities of the Company, or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination of shares,
appropriate adjustments shall be made by the Committee in the number and kind
of shares for the purchase of which Options may be granted, including
adjustments of the limitations in Sections 2.1 and 2.2 on the maximum number
and kind of shares which may be issued or exercise of Options.
ARTICLE III
GRANTING OF OPTIONS
SECTION 3.1 - ELIGIBILITY
Any Director, Officer, Employee or consultant to the Company shall be
eligible to be granted Options, except as provided in Sections 3.2. However,
no Incentive Stock Option shall be granted
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to any Director or other person who is not an Employee of the Company.
SECTION 3.2 - QUALIFICATION OF INCENTIVE STOCK OPTIONS
No Incentive Stock Option shall be granted unless such Option, when
granted, qualifies as an "incentive stock options" under Section 422A of the
Code.
SECTION 3.3 - GRANTING OF OPTIONS
(a) The Committee shall from time to time, in its absolute discretion:
(i) Determine which individuals are Directors, Officers, Employees
or consultants and select from among the Directors, Officers, Employees
or consultants (including those to whom Options have been previously
granted under the Plan) such of them as in its opinion should be granted
Options; and
(ii) Determine the number of shares to be subject to such Options
granted to such selected Directors, Officers, Employees or consultants,
and determine whether such Options are to be Incentive Stock Options or
Non-Qualified Options, whether stock appreciation rights should be
granted for all or part of the Options granted; and
(iii) Determine the terms and conditions of such Options, consistent
with the Plan.
(b) Upon the selection of a Director, Officer, Employee or Consultant
to be granted an Option, the Committee shall instruct an officer of the
Company to issue such Option and may impose such conditions on the grant of
such Option as it deems appropriate. Without limiting the generality of the
preceding sentence, the Committee may, in its discretion and on such terms as
it deems appropriate, require as a condition to the grant of a Non-Qualified
Option to a Director, Officer, Employee or consultant that the Optionee
surrender for cancellation some or all of the unexercised Non-Qualified
Options which have been previously granted to him. A Non-Qualified Option the
grant of which is conditioned upon such surrender may have an option price
lower (or higher) than the option price of the surrendered Non-Qualified
Option, may cover the same (or a lesser or greater) number of shares as the
surrendered Non-Qualified Option, may contain such other terms as the
Committee deems appropriate and provide that the new Non-Qualified Stock
Option be exercisable in accordance with its terms, without regard to the
number of shares, price, option period, or any other term or condition of the
surrendered Non-Qualified Option.
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ARTICLE IV
TERMS OF OPTIONS
SECTION 4.1 - OPTION AGREEMENT
Each Option shall be evidenced by a written Stock Option Agreement, which
shall be executed by the Optionee and an authorized Officer of the Company
and which shall contain such terms and conditions as the Committee shall
determine, consistent with the Plan. Stock Option Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to qualify such Options as "incentive stock options" under Section
422A of the Code.
SECTION 4.2 - OPTION PRICE
(a) The price of the shares subject to each Option shall be set by the
Committee; provided, however, that the price per share of shares subject to
an Incentive Stock Option shall be not less than 100% of the fair market
value of such shares on the date such Option is granted, or 110% of the fair
market value of the Optionee holds 10% or more of the Company's Common Stock,
and that the price per share of shares subject to a Non-Qualified Option
shall not be less than 85% of the fair market value of such shares on the
date such Option is granted.
(b) For purposes of the Plan, the fair market value of a share of the
Company's stock as of a given date shall be: (i) the closing price of a
share of the Company's stock on the principal exchange on which shares of the
Company's stock are then trading, if any, on such date, or, if shares were
not traded on such date, then on the next preceding trading day during which
a sale occurred; or (ii) if such stock is not traded on an exchange but is
quoted on NASDAQ or a successor quotation system, (1) the last sales price (if
the stock is then listed as a National Market Issue under the NASD National
Market System) or (2) the mean between the closing representative bid and
asked prices (in all other cases) for the stock on such date as reported by
NASDAQ or such successor quotation system; or (iii) if such stock is not
publicly traded on an exchange and not quoted on NASDAQ or a successor
quotation system, the mean between the closing bid and asked prices for the
stock on such date as determined in good faith by the Committee; or (iv) if
the Company's stock is not publicly traded, the fair market value established
by the Committee acting in good faith.
SECTION 4.3 - COMMENCEMENT OF EXERCISABILITY
(a) Subject to the provisions of Section 4.3(b) and 7.3, Options shall
become exercisable at such times and in such installments (which may be
cumulative) as shall be provided in the terms of each individual Option;
provided, however, that by a resolution adopted after an Option is granted
the Committee may, on such terms and conditions as it may determine to be
appropriate a accelerate time at which such Option or any portion thereof
may be exercised.
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<PAGE>
SECTION 4.4 - EXPIRATION OF OPTIONS
(a) No Option may be exercised to any extent by anyone after the first
to occur of the following events:
(i) The earlier of the expiration of ten years from the date the
Option was granted (five years if the Optionee holds at the time of grant
10% or more of the Company's Common Stock) or the expiration of three
years from the date of the Optionee's death; or
(ii) Except in the case of any Optionee who is disabled (within the
meaning of Section 22(e)(3) of the Code), the expiration of twelve (12)
months from the date of the Optionee's Termination of Employment for any
reason other than such Optionee's death unless the Optionee dies within
said twelve (12) month period; or
(iii) In the case of an Optionee who is disabled (within the meaning
of Section 22(e)(3) of the Code), the expiration of three years from the
date of the Optionee's Termination of Employment for any reason other
than such Optionee's death unless the Optionee dies within said
three-year period.
(b) Subject to the provisions of Section 4.5, the Committee shall
provide, in the terms of each individual Option, when such Option expires and
becomes unexercisable.
SECTION 4.5 - RESERVATION OF RIGHTS
Nothing in this Plan or in any Stock Option Agreement hereunder shall
confer upon any Employee-Option any right to continue in the employ of the
Company or shall interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to discharge any Optionee at
any time for any reason whatsoever, with or without cause.
SECTION 4.6 - ADJUSTMENTS IN OUTSTANDING OPTIONS
In the event that the outstanding shares of the stock subject to Options
are changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend, or combination of shares, the Committee shall make an appropriate
and equitable adjustment in the number and kind of shares as to which all
outstanding Options, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment in an outstanding Option shall be made without change in the total
price applicable to the Option or the unexercised portion of the Option
(except for any change in the aggregate price resulting from rounding-off of
share quantities or prices) and with any necessary corresponding adjustment
in Option price per share; provided, however, that, in the case of Incentive
Stock Options, each such adjustment shall be made in such manner as not to
constitute a "modification" within the meaning of Section
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425(h)(3) of the Code. Any such adjustment made by the Committee shall be
final and binding upon all Optionees, the Company and all other interested
persons.
Section 4.7 - Merger Consolidation, Acquisition, Liquidation or Dissolution
The Committee shall provide by the terms of each Option that, upon or in
connection with the merger or consolidation of the Company with or into
another corporation, the acquisition by another corporation or person of all
or substantially all of the Company's assets or 80% or more of the Company's
then outstanding voting stock or the liquidation or dissolution of the
Company, such Option shall be assumed or an equivalent option substituted by
any successor corporation of the Company. The Committee may also, in its
absolute discretion and on such terms and conditions as it deems appropriate,
provide, either by the terms of such Option or by a resolution adopted prior
to the occurrence of such merger, consolidation, acquisition, liquidation, or
dissolution, that, for some period of time prior to such event, such Option
shall be exercisable as to all shares covered thereby, notwithstanding
anything to the contrary in Section 4.3, and or any installment provisions of
such Option.
ARTICLE V
EXERCISE OF OPTIONS
Section 5.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only he or she may exercise an
Option granted to him or her, or any portion thereof. After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when
such portion becomes unexercisable, be exercised by his or her personal
representative or by any person empowered to do so under the decreased
Optionee's will or under the then applicable laws of descent and distribution.
Section 5.2 - Partial Exercise
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable, such Option or
portion thereof may be exercised in whole or in part; provided, however that
the Company shall not be required to issue fractional shares and the
Committee may, by the terms of the Options, require any partial exercise to
be with respect to a specified minimum number of shares.
Section 5.3 - Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when such Option or such
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<PAGE>
portion becomes unexercisable under Section 4.4:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) for the shares with
respect to which such Option or portion is thereby exercised; or
(ii) Shares of any class of the Company's stock owned by the
Optionee duly endorsed for transfer to the Company with a fair market
value (as determinable under Section 4.2 (b)) on the date of delivery
equal to the aggregate Option price of the shares with respect to which
such Option or portion is thereby exercised, or options duly endorsed
having an aggregate value (measured by the difference between fair market
value of the Shares and the Option price) equal to the aggregate Option
price of the Shares with respect to which such Option or portion thereof
is thereby exercised; or
(iii) With the consent of the Committee, a promissory note bearing
interest (at least such rate as shall then preclude the imputation of
interest under the Code or any successor provision) and payable upon such
terms as may be prescribed by the Committee. The Committee may also
prescribe the form of such note and the security to be given for such note.
No Option may, however, be exercised by delivery of a promissory note or by
a loan from the Company when or where such loan or other extension of
credit is prohibited by law; or
(iv) Any combination of the consideration provided in the
foregoing subsections (i), (ii), and (iii); and
(c) Such representations and documents as the committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer agents and
registrars; and
(d) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option or portion thereof.
Section 5.4 - Conditions to Issuance of Stock Certificates
The shares of stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then
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<PAGE>
been reacquired by the Company. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon
the exercise of any Option or portion thereof prior to fulfillment of all of
the following conditions:
(a) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary
or advisable; and
(b) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(c) The payment to the Company of all amounts which it is required to
withhold under federal, state, or local law in connection with the exercise
of the Option; and
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may establish from time to time for reasons of
administrative convenience.
SECTION 5.5 - RIGHTS AS SHAREHOLDERS
The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect of any shares
purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
holders.
SECTION 5.6 - TRANSFER RESTRICTIONS
The Committee, in its absolute discretion, may impose such restrictions
on the transferability of the shares purchasable upon the exercise of an
Option as it deems appropriate. Any such restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares. The Committee may require the Director, Officer,
Employee or Consultant to give the Company prompt notice of any disposition of
shares of stock, acquired by exercise of an Option, within two years from the
date of granting such Option or one year after the transfer of such shares to
such Director, Officer, Employee or Consultant. The Committee may direct that
the certificates evidencing shares acquired by exercise of an Option refer to
such requirement to give prompt notice of disposition.
SECTION 5.7 - WITHHOLDING TAX
Should any amount be required to be withheld for payment of taxes under
the Code from an
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Optionee with respect to the exercise of any Option, Optionee in his or her
discretion may pay such withholding tax in shares of the Company's Common
Stock, at the fair market value of such Common Stock on the date of payment.
SECTION 5.8 - REPORTS
The Company shall provide annually to each Optionee a copy of the
Company's financial statements.
ARTICLE VI
ADMINISTRATION
SECTION 6.1 - STOCK OPTION COMMITTEE
The Stock Option Committee shall consist of at least two Directors,
appointed by and holding office at the pleasure of the board. Appointment of
Committee members shall be effective upon acceptance of appointment.
Committee members may resign at any time by delivering written notice to the
Board. Vacancies in the Committee shall be filled by the Board.
SECTION 6.2 - DUTIES AND POWERS OF COMMITTEE
It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt or
amend such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. The Committee may accelerate the exercise date of any option and
determine the right of any person to exercise the rights on behalf of any
Optionee. Any such interpretations and rules in regard to Incentive Stock
Options and/or Rule 701 promulgated under the Securities Act and Section
25012(o) of the California Corporation Code shall be consistent with the
basic purpose of the Plan to grant "incentive stock options" within the
meaning of Section 422A of the Code and/or Options pursuant to Rule 701 and
Section 25102(o). In its absolute discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Committee
under the Plan.
SECTION 6.3 - MAJORITY RULE
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
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SECTION 6.4 - COMPENSATION: PROFESSIONAL ASSISTANCE: GOOD FAITH ACTIONS
Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and its
Officers and Directors shall be entitled to rely upon the advice, opinions,
or valuations of any such persons. All actions taken and all interpretations
and determinations made by the Committee or in good faith shall be final and
binding upon all Optionees, the Company, and all other interested persons. No
member of the Committee shall be personally liable for any action,
determination, or interpretation made in good faith with respect to the Plan
or the Options, and all members of the Committee shall be fully protected by
the Company in respect to any such action, determination, or interpretation.
ARTICLE VII
OTHER PROVISIONS
SECTION 7.1 - OPTIONS NOT TRANSFERABLE
No Option or interest or right therein or part thereof shall be liable
for the debts, contracts, or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation, or any
other means whether such disposition be voluntary or involuntary or by
operation of law, by judgment, levy, attachment, garnishment, or any other
legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 7.1 shall prevent transfers by will or
by the applicable laws of descent and distribution.
SECTION 7.2 - AMENDMENT SUSPENSION OR TERMINATION OF THE PLAN
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the board or the
Committee. Neither the amendment, suspension, nor termination of the Plan
shall, without the consent of the holder of the Option, alter or impair any
rights or obligations under any Option theretofore granted. No Option may be
granted during any period of suspension nor after termination of the Plan,
and in no event may any Option be granted under this Plan after the first to
occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted; or
(b) The expiration of ten years from the date the Plan is approved by
the Company's shareholders under Section 7.3.
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SECTION 7.3 - APPROVAL OF PLAN BY SHAREHOLDERS
This Plan will be submitted for the approval of the Company's
Shareholders within 12 months after the date of the Board's initial adoption
of the Plan. Options may be granted prior to such shareholder approval;
provided, however, that such Incentive Stock Options shall not be exercisable
prior to the time when the Plan is approved by the shareholders; provided,
further, that if such approval has not been obtained at the end of said
12-month period, all Options previously granted under the Plan shall
thereupon be canceled and become null and void.
SECTION 7.4 - EFFECT OF PLAN UPON OTHER OPTION AND COMPENSATION PLANS
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company. Nothing in this Plan shall be
construed to limit the right of the Company (a) to establish any other forms
of incentives or compensation for employees or consultants of the Company or
(b) to grant or assume options otherwise than under this Plan in connection
with any proper grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation, or otherwise of the
business, stock, or assets of any corporation, firm, or association.
SECTION 7.5 - TITLES
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.
* * * *
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of Nurescell Inc. on Jun/15/1998, 1998.
-----------
Executed on this 31 day of Jul., 1998.
-- ---
/s/ [Illegible]
--------------------------------
Secretary & President
Corporate Seal
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INDEMNIFICATION AGREEMENT
-------------------------
This Agreement is made as of September 15, 1998, by and between
NURESCELL, INC.; a Nevada corporation (the "Company"), and the undersigned, a
director and/or officer of the Company ("Indemnitee"), with respect to the
following facts.
A. The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations
unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that
the exposure frequently bears no reasonable relationship to the compensation
of such directors and officers.
B. The following facts contribute to unfairness to directors and
officers: (i) laws regarding the duties of directors and officers are often
ambiguous; (ii) costs of litigation may be so enormous (whether or not the
case is meritorious) that the defense and/or settlement of such litigation is
often beyond the personal resources of officers and directors; and
(iii) delay in litigation may extend the period of exposure to an officer or
director until after retirement or death, thus forcing spouses, heirs,
executors or administrators to expend funds.
C. Indemnitee questions that adequacy and reliability of the protection
presently afforded by both the Nevada and California General Corporation Law
(the "Corporation Law") and the Company's Articles of Incorporation and
Bylaws, in part because certain of the indemnification provisions of the
Corporation Law are for the most part merely permissive and because the
impact of provisions of the Company's Articles of Incorporation and Bylaws is
presently uncertain.
D. Indemnitee currently serves as director and/or officer of the
Company. Indemnitee is concerned about continuing to serve the Company as a
director and/or officer without assurance that indemnities available to him
are, and will be, adequate to protect him against the risks associated with
his service to the Company.
E. The Company, in order to induce Indemnitee to continue to serve the
Company as a director and/or officer has agreed to provide Indemnitee with
the benefits contemplated by this Agreement, which benefits are intended to
provide Indemnitee with the maximum possible protection permitted by law.
NOW, THEREFORE, in consideration of the foregoing and the promises,
conditions, representations and warranties set forth herein, the Company and
Indemnitee hereby agrees as follows:
-1-
<PAGE>
1. DEFINITIONS. The following terms, as used herein, shall have the
following respective meanings:
1.1 "COVERED ACT" means (i) any actual or alleged action taken or
attempted by Indemnitee (including, without limitation, any breach of duty,
neglect, error, misstatement, or misleading statement) (a) in his capacity
as, or otherwise by reason of, or arising out of his being, a director,
officer, employee or other agent of the Company, or (b) by reason of the fact
he is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise; or (ii) any inaction or omission on Indemnitee's part
while acting in any of the foregoing capacities. For purposes solely of this
Agreement, it shall be conclusively deemed between the parties that the
Indemnitee is serving at the request of the Company whenever such director
serves as an officer, director, employee or other agent of any business
entity controlling, controlled by or under common control with the Company.
1.2 "EXCLUDED CLAIM" means any payment for Losses or Expenses in
connection with any claim: (1) for an accounting of profits in fact made from
the purchase or sale by Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended,
or similar provisions of any state law, if the Company is in fact entitled to
recover such profits; or (ii) the payment of which by the Company under this
Agreement is not permitted by applicable law, including but not limited to,
statutory prohibitions under Federal or State law; or (iii) initiated or
brought voluntarily by Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification or advancement of Expenses and Losses or a proceeding
initiated with the approval of a majority of the members of the Board of
Directors; or (iv) the payment of which has been made directly to Indemnitee
by an insurance carrier under a policy of directors' and officers' liability
insurance maintained by the Company.
Any facts pertaining to any other director, officer, employee
or agent of the Company shall not be imputed to Indemnitee for the purpose of
determining an Excluded Claim.
1.3 "EXPENSES" means any reasonable expenses incurred by Indemnitee
as a result of a claim or claims whether brought by or in the right of the
Company for Covered Acts.
1.4 "LOSS" means any amount which Indemnitee pays or is obligated
to pay as a result of a claim or claims.
-2-
<PAGE>
2. INDEMNIFICATION.
2.1 The Company, at the request of Indemnitee, shall indemnify
Indemnitee and hold him harmless from any and all Losses and Expenses
subject, in each case, to the further provisions of this Agreement.
2.2 The protection afforded to Indemnitee hereunder is intended to
supplement the other protections to which Indemnitee may be entitled now or
hereafter under statutory law, the Company's Articles of Incorporation or
Bylaws, any insurance policies maintained by the Company, vote of
stockholders or of directors or otherwise, and all of such protections and
the provisions hereof are intended to be cumulative.
2.3 Indemnitee may seek such indemnification under statutory law,
the Company's Articles of Incorporation or Bylaws, the provisions of
Section 2.1 of this Agreement, or otherwise concurrently or in such sequence
as Indemnitee may choose, in his sole discretion.
2.4 The Company shall have no obligation to indemnify Indemnitee
for and hold him harmless from any Loss or Expense which constitutes an
Excluded Claim.
3. INDEMNIFICATION PROCEDURES.
3.1 Promptly after receipt by Indemnitee of notice of the
commencement of or the threat of commencement of any action, suit or
proceeding, Indemnitee shall notify the Company of the commencement or threat
thereof.
3.2 With respect to any such action suit or proceeding, Indemnitee
may at his option, either control the defense thereof himself or require the
Company to defend him. If Indemnitee requires the Company to defend him, then
the Company shall promptly undertake to defend any such action, suit or
proceeding, at the Company's sole cost and expense, utilizing counsel of the
Indemnitee's choice who has been reasonably approved by the Company. If
appropriate the Company shall have the right to participate in the defense of
such action, suit or proceeding.
3.3 If the Company shall fail to defend Indemnitee in a timely
manner against any such action Indemnitee shall have the right to do so,
including the right to make any compromise or settlement thereof, and to
recover from the Company all attorney's fees, reimbursements and all amounts
paid as a result thereof.
3.4 Expenses and losses incurred or to be incurred by Indemnitee
from time to time as a result of any actions, covered by the indemnity
provisions of this Agreement, shall be paid by the Company within thirty (30)
days of written request of the Indemnitee. At the election of Indemnitee,
Indemnitee may from time to time request the Company to advance to him funds
to pay any expenses for which there is an actual written invoice from a
third-party which would be subject to reimbursement
-3-
<PAGE>
hereunder. The company shall provide such advance within seven (7) business
days after written request thereof. Indemnitee agrees to reimburse the
Company for all losses and expenses paid or advanced by the Company in
connection with any such action in the event that a determination is made
that the Indemnitee is not entitled to be Indemnified by the Company for such
losses and expenses because said claim is an Excluded Claim.
4. SETTLEMENT. Except as otherwise provided in Section 3.3, hereof,
Indemnitee shall not settle any suit, action or proceeding without the
Company's prior written consent. The Company shall not settle any suit,
action or proceeding in any manner which would impose any obligation on
Indemnitee which is not covered by indemnification hereunder without
Indemnitee's written consent. Neither the Company nor Indemnitee shall
unreasonable withhold their consent to any proposed settlement.
5. MISCELLANEOUS.
5.1 NOTICES. Any communication contemplated under this Agreement
shall be in writing and shall be effective upon personal delivery or five
days after deposit in the United States mail, postage prepaid, certified or
registered, return receipt requested, addressed as follows or to such other
address as may be specified in the same manner.
If to Company: Nurescell, Inc.
2030 Main Street
Suite 1300
Irvine, California
If to Indemnitee:
5.2 ENFORCEMENTS.
(a) All agreements and obligations of the Company contained
herein shall continue during the period the Indemnitee is a director,
officer, employee of agent of the Company (or is serving at the request of
the Company as a director, officer, employee or agent of another corporation
or other enterprise) and shall continue thereafter so long as Indemnitee
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal or investigative, by
reason of the fact that Indemnitee was a director or officer of the Company
or serving in any other capacity referred to herein.
(b) The Company's indemnity obligations hereunder shall be
applicable to any and all claims made after the date hereof regardless of
when the facts upon which such claims are based occurred, including times
prior to the date hereof.
-4-
<PAGE>
(c) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the
Company hereby, in order to induce Indemnitee to serve, or continue to serve,
as a director and/or officer of the Company, and acknowledges that Indemnitee
is relying upon this Agreement in agreeing to serve or in continuing to serve
in such capacity.
5.3 SEVERABILITY. In the event that any provision of this Agreement
is determined by a court to require the Company to do or to fail to do any
act which is in violation of applicable law, such provision shall be limited
or modified in its application to the minimum extent necessary to avoid a
violation of law and, as so limited or modified, such provision and the
balance of this Agreement shall be enforceable in accordance with their
terms. Without limiting the generality of the foregoing, if this Agreement or
any portion thereof shall be invalidated on any ground, the Company shall
nevertheless indemnity Indemnitee to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated.
5.4 SUCCESSOR AND ASSIGNS. This Agreement shall be (i) binding upon
all successors and assigns of the Company (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law) and (ii) shall be binding on and inure to the benefit of
the heirs, partners, personal representatives and estate of Indemnitee.
IN WITNESS WHEREOF, the Company and Indemnitee have executed this
Agreement as of the date and year first above written.
"Company" NURESCELL, INC., a Nevada Corporation
By
-------------------------------------
Name: Adrian Joseph
----------------------------------
Title: President
---------------------------------
By
-------------------------------------
Name: Sharon Nitka
----------------------------------
Title: Secretary
---------------------------------
"Indemnitee"
-------------------------------------
Name:
----------------------------------
-5-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
I consent to inclusion in this Form 10-SB Registration Statement of my
report dated October 6, 1998 (except for Note (2, 7, 8 and 10) as to which the
date is December 28, 1998) on my audits of the financial statements of Nurescell
Inc.
RONALD L. JAMIESON, CPA
Los Alamitos, California
February 10, 1999
Exhibit 12.1
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF NURESCELL INC. (A DEVELOPMENT STAGE COMPANY) FOR THE
PERIOD FROM MAY 12, 1998 (DATE OF INCEPTION) TO SEPTEMBER 30, 1998
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> MAY-12-1998
<PERIOD-END> SEP-30-1998
<CASH> 295,845
<SECURITIES> 0
<RECEIVABLES> 20,417
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 316,262
<PP&E> 46,952
<DEPRECIATION> (1,643)
<TOTAL-ASSETS> 419,061
<CURRENT-LIABILITIES> 33,822
<BONDS> 0
0
0
<COMMON> 1,302
<OTHER-SE> 608,198
<TOTAL-LIABILITY-AND-EQUITY> 419,061
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 207,261
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (207,261)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (207,261)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
